10/31/2024 | Press release | Distributed by Public on 10/31/2024 15:21
This amended and restated preliminary pricing supplement amends and restates in full the preliminary pricing supplement dated October 30,2024 for CUSIP No. 09711FV38.
This pricing supplement, which is not complete and may be changed, relates to an effective Registration Statement under the Securities Act of 1933. This pricing supplement and the accompanying product supplement, prospectus supplement and prospectus are not an offer to sell these Notes in any country or jurisdiction where such an offer would not be permitted.
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The Auto-Callable Notes Linked to the Russell 2000® Index, due November 4, 2027 (the "Notes") are expected to price on October 31, 2024 and expected to issue on November 5, 2024.
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Approximate 3 year term if not called prior to maturity.
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Payment on the Notes will depend on the performance of the Russell 2000® Index (the "Underlying").
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Beginning with the May 1, 2025 Call Observation Date, automatically callable quarterly for an amount equal to the applicable Call Amount if, on the applicable Call Observation Date, the Observation Value of the Underlying is equal to or greater than its applicable Call Value. The Call Values are indicated on page PS-2 and the Call Observation Dates and Call Amounts are indicated on page PS-4.
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Assuming the Notes are not called prior to maturity, if the Ending Value of the Underlying is greater than or equal to 90% of its Starting Value, at maturity, you will receive at least $1,219.00 (set on the pricing date) per $1,000.00 in principal amount of your Notes.
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However, assuming the Notes are not called prior to maturity, if the Underlying declines by more than 35% from its Starting Value, at maturity your investment will be subject to 1:1 downside exposure to decreases in the value of the Underlying, with up to 100% of the principal at risk. Otherwise, if the Notes are not called prior to maturity and the Ending Value of the Underlying is less than 90.00% of its Starting Value but greater than or equal to 65% of its Starting Value, at maturity you will receive the principal amount of your Notes.
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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.
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No periodic interest payments.
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The Notes will not be listed on any securities exchange.
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CUSIP No. 09711FV38.
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Public offering price(1)
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Underwriting discount(1)(2)(3)
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Proceeds, before expenses, to BofA Finance(2)
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Per Note
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$1,000.00
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$21.00
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$979.00
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Total
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(1)
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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 $979.00 per $1,000.00 in principal amount of Notes.
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(2)
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The underwriting discount per $1,000.00 in principal amount of Notes may be as high as $21.00, resulting in proceeds, before expenses, to BofA Finance of as low as $979.00 per $1,000.00 in principal amount of Notes.
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(3)
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The underwriting discount per $1,000.00 in principal amount of Notes reflects a sales commission of up to $20.00 and a structuring fee of up to $1.00.
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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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Selling Agent
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Issuer:
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BofA Finance
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Guarantor:
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BAC
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Denominations:
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The Notes will be issued in minimum denominations of $1,000.00 and whole multiples of $1,000.00 in excess thereof.
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Term:
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Approximately 3 years, unless previously automatically called.
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Underlying:
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The Russell 2000® Index (Bloomberg symbol: "RTY"), a price return index.
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Pricing Date*:
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October 31, 2024
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Issue Date*:
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November 5, 2024
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Valuation Date*:
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November 1, 2027, subject to postponement as described under "Description of the Notes-Certain Terms of the Notes-Events Relating to Observation Dates" in the accompanying product supplement.
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Maturity Date*:
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November 4, 2027
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Starting Value:
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The closing level of the Underlying on the pricing date.
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Observation Value:
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The closing level of the Underlying on the applicable Call Observation Date.
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Ending Value:
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The closing level of the Underlying on the Valuation Date.
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Call Values:
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With respect to the Underlying on the first through third Call Observation Dates, 100.00% of the Starting Value;
With respect to the Underlying on the fourth through seventh Call Observation Dates, 95.00% of the Starting Value; and
With respect to the Underlying on the eighth through eleventh Call Observation Dates, 90.00% of the Starting Value.
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Redemption Barrier:
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90.00% of the Starting Value.
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Threshold Value:
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65.00% of the Starting Value.
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Automatic Call:
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Beginning with the May 1, 2025 Call Observation Date, all (but not less than all) of the Notes will be automatically called at an amount equal to the applicable Call Amount if the Observation Value of the Underlying is greater than or equal to the applicable Call Value on any Call Observation Date. If the Notes are automatically called, the applicable Call Amount will be paid on the applicable Call Payment Date. No further amounts will be payable following an Automatic Call.
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Redemption Amount:
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If the Notes have not been automatically called prior to maturity, the Redemption Amount per $1,000.00 in principal amount of Notes will be:
a) If the Ending Value of the Underlying is greater than or equal to the Redemption Barrier:
b) If the Ending Value of the Underlying is less than the Redemption Barrier but is greater than or equal to the Threshold Value:
c) If the Ending Value of the Underlying is less than the Threshold Value:
In this case, the Redemption Amount will be less than 65.00% of the principal amount and you could lose up to 100.00% of your investment in the Notes.
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AUTO-CALLABLE NOTES | PS-2
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Call Observation Dates*:
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As set forth beginning on page PS-4
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Call Payment Dates*:
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As set forth beginning on page PS-4
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Call Amounts (per $1,000.00 in principal amount):
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As set forth beginning on page PS-4
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Calculation Agent:
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BofA Securities, Inc. ("BofAS"), an affiliate of BofA Finance.
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Selling Agent:
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BofAS
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CUSIP:
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09711FV38
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Underlying Return:
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Events of Default and Acceleration:
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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; provided that, if the event of default occurs on or prior to the Valuation Date (i.e., not during the period from after that Valuation Date to the original maturity date of the Notes), then the payment on the Notes will be determined as described above under the caption "-Automatic Call," calculated as if the next scheduled Call Observation Date were three Trading Days prior to the date of acceleration, and in such a case, the calculation agent shall pro-rate the applicable Call Amount according to the period of time elapsed between the issue date of the notes and 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.
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AUTO-CALLABLE NOTES | PS-3
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Call Observation Dates*
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Call Payment Dates
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Call Amounts (per $1,000.00 in principal amount)**
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Call Values
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May 1, 2025
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May 6, 2025
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At least $1,036.50
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100.00%
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July 31, 2025
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August 5, 2025
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At least $1,054.75
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100.00%
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November 7, 2025
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November 13, 2025
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At least $1,073.00
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100.00%
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February 2, 2026
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February 5, 2026
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At least $1,091.25
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95.00%
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May 1, 2026
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May 6, 2026
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At least $1,109.50
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95.00%
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July 31, 2026
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August 5, 2026
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At least $1,127.75
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95.00%
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November 2, 2026
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November 5, 2026
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At least $1,146.00
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95.00%
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February 1, 2027
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February 4, 2027
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At least $1,164.25
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90.00%
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May 3, 2027
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May 6, 2027
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At least $1,182.50
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90.00%
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August 2, 2027
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August 5, 2027
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At least $1,200.75
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90.00%
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AUTO-CALLABLE NOTES | PS-4
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AUTO-CALLABLE NOTES | PS-5
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Ending Value
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Underlying Return
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Redemption Amount per Note
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Return on the Notes(1)
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160.00
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60.00%
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$1,219.00
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21.90%
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150.00
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50.00%
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$1,219.00
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21.90%
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140.00
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40.00%
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$1,219.00
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21.90%
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130.00
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30.00%
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$1,219.00
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21.90%
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120.00
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20.00%
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$1,219.00
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21.90%
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110.00
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10.00%
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$1,219.00
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21.90%
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105.00
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5.00%
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$1,219.00
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21.90%
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102.00
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2.00%
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$1,219.00
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21.90%
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100.00(2)
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0.00%
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$1,219.00
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21.90%
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90.00(3)
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-10.00%
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$1,219.00
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21.90%
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89.99
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-10.01%
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$1,000.00
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0.00%
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80.00
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-20.00%
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$1,000.00
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0.00%
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70.00
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-30.00%
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$1,000.00
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0.00%
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65.00(4)
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-35.00%
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$1,000.00
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0.00%
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64.99
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-35.01%
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$649.90
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-35.01%
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60.00
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-40.00%
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$600.00
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-40.00%
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50.00
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-50.00%
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$500.00
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-50.00%
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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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AUTO-CALLABLE NOTES | PS-6
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(1)
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The "Return on the Notes" is calculated based on the Redemption Amount.
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(2)
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The hypothetical Starting Value of 100 used in the table above has been chosen for illustrative purposes only and does not represent a likely Starting Value for the Underlying.
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(3)
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This is the hypothetical Redemption Barrier.
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(4)
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This is the hypothetical Threshold Value.
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AUTO-CALLABLE NOTES | PS-7
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Your investment may result in a loss; there is no guaranteed return of principal. There is no fixed principal repayment amount on the Notes at maturity. If the Notes are not automatically called prior to maturity and the Ending Value of the Underlying 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 Underlying and you will lose 1% of the principal amount for each 1% that the Ending Value of the Underlying is less than the Starting Value. In that case, you will lose a significant portion or all of your investment in the Notes.
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Any positive investment return on the Notes is limited. You will not participate in any increase in the level of any Underlying. Any positive investment return is limited to the applicable Call Amount or the maximum Redemption Amount of at least $1,219.00 (set on the pricing date) per $1,000.00 in principal amount of Notes, as applicable, if the Observation Value or Ending Value of each Underlying is greater than or equal to its applicable Call Value or Redemption Barrier, as applicable, on any Call Observation Date or the Valuation Date, as applicable. In contrast, a direct investment in the securities included in the Underlying would allow you to receive the benefit of any appreciation in its 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 return on the Notes may be less than a comparable investment directly in the securities held by or included in the Underlyings. There is no guarantee that the Notes will be called or, if not called, redeemed at maturity for more than the principal amount, and it is possible that you will not receive any positive return on the Notes.
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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 Observation Value or Ending Value of the Underlying exceeds its Starting Value, Redemption Barrier, Call Value or Threshold Value.
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The Notes are subject to a potential Automatic Call, which would limit your ability to receive further payment on the Notes. The Notes are subject to a potential Automatic Call. The Notes will be automatically called if, on any Call Observation Date, the Observation Value of each Underlying is greater than or equal to its applicable Call Value. If the Notes are automatically called prior to the Maturity Date, you will be entitled to receive the applicable Call Amount with respect to the applicable Call Observation Date and no further amounts will be payable following the Automatic Call. In this case, you will lose the opportunity to receive payment of any higher Call Amount or Redemption Amount that otherwise would be payable after the date of the Automatic Call. If the Notes are called prior to the Maturity Date, you may be unable to invest in other securities with a similar level of risk that could provide a return that is similar to the Notes.
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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.
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The Call Amount or Redemption Amount, as applicable, will not reflect changes in the level of the Underlying other than on the Call Observation Dates or Valuation Date, as applicable. The level of the Underlying during the term of the Notes other than on the Call Observation Dates or Valuation Date, as applicable, will not affect payments on the Notes. Notwithstanding the foregoing, investors should generally be aware of the performance of the Underlying while holding the Notes, as the performance of the Underlying may influence the market value of the Notes. The calculation agent will determine whether the Notes will be automatically called and will calculate the Call Amount or the Redemption Amount, as applicable, by comparing only the Starting Value, the applicable Call Value, the Redemption Barrier or the Threshold Value, as applicable, to the Observation Value or the Ending Value for the Underlying. No other level of the Underlying will be taken into account. As a result, if the Notes are not automatically called prior to maturity and the Ending Value of the Underlying is less than the Threshold Value, you will receive less than the principal amount at maturity even if the level of the Underlying was always above the Threshold Value prior to the Valuation Date.
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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 Underlying. 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(s) 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 |
AUTO-CALLABLE NOTES | PS-8
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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 value of the Underlying, an improvement in our or the Guarantor's credit ratings will not reduce the other investment risks related to the Notes.
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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.
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The public offering price you pay for the Notes will exceed their initial estimated value. The range of initial estimated values of the Notes that is provided on the cover page of this preliminary pricing supplement, and the initial estimated value as of the pricing date that will be provided in the final pricing supplement, are each estimates only, determined as of a particular point in time by reference to our and our affiliates' pricing models. These pricing models consider certain assumptions and variables, including our credit spreads and those of the Guarantor, the Guarantor's internal funding rate, mid-market terms on hedging transactions, expectations on interest rates, dividends and volatility, price-sensitivity analysis, and the expected term of the Notes. These pricing models rely in part on certain forecasts about future events, which may prove to be incorrect. If you attempt to sell the Notes prior to maturity, their market value may be lower than the price you paid for them and lower than their initial estimated value. This is due to, among other things, changes in the level of the Underlying, 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.
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The initial estimated value does not represent a minimum or maximum price at which we, BAC, BofAS or any of our other affiliates would be willing to purchase your Notes in any secondary market (if any exists) at any time. The value of your Notes at any time after issuance will vary based on many factors that cannot be predicted with accuracy, including the performance of the Underlying, our and BAC's creditworthiness and changes in market conditions.
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We cannot assure you that a trading market for your Notes will ever develop or be maintained. We will not list the Notes on any securities exchange. We cannot predict how the Notes will trade in any secondary market or whether that market will be liquid or illiquid.
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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 Underlying, or futures or options contracts or exchange traded instruments on the Underlying or those securities, or other instruments whose value is derived from the Underlying 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 Underlying, except to the extent that BAC's common stock may be included in the Underlying, we, the Guarantor and our other affiliates, including BofAS, do not control any company included in the Underlying, 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 level of the Underlying in a manner that could be adverse to your investment in the Notes. On or before the pricing date, any purchases or sales by us, the Guarantor or our other affiliates, including BofAS or others on our or their behalf (including those for the purpose of hedging some or all of our anticipated exposure in connection with the Notes), may affect the level of the Underlying. Consequently, the level of the Underlying may change subsequent to the pricing 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 expect to engage in hedging activities that could affect the level of the Underlying on the pricing 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 level of the Underlying, the market value of your Notes prior to maturity or the amounts payable on the Notes. |
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There may be potential conflicts of interest involving the calculation agent, which is an affiliate of ours. We have the right to appoint and remove the calculation agent. One of our affiliates will be the calculation agent for the Notes and, as such, will make a variety of determinations relating to the Notes, including the amounts that will be paid on the Notes. Under some circumstances, these duties
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AUTO-CALLABLE NOTES | PS-9
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could result in a conflict of interest between its status as our affiliate and its responsibilities as calculation agent.
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The Notes are subject to risks associated with small-size capitalization companies. The stocks comprising the RTY are issued by companies with small-sized market capitalization. The stock prices of small-size companies may be more volatile than stock prices of large capitalization companies. Small-size capitalization companies may be less able to withstand adverse economic, market, trade and competitive conditions relative to larger companies. Small-size capitalization companies may also be more susceptible to adverse developments related to their products or services.
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The publisher or the sponsor of the Underlying may adjust the Underlying in a way that affects its level, and the publisher or the sponsor has no obligation to consider your interests. The publisher or the sponsor of the Underlying can add, delete, or substitute the components included in the Underlying or make other methodological changes that could change its level. Any of these actions could adversely affect the value of your Notes.
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The U.S. federal income tax consequences of an investment in the Notes are uncertain, and may be adverse to a holder of the Notes. No statutory, judicial, or administrative authority directly addresses the characterization of the Notes or securities similar to the Notes for U.S. federal income tax purposes. As a result, significant aspects of the U.S. federal income tax consequences of an investment in the Notes are not certain. Under the terms of the Notes, you will have agreed with us to treat the Notes as single financial contracts, as described below under "U.S. Federal Income Tax Summary-General." If the Internal Revenue Service (the "IRS") were successful in asserting an alternative characterization for the Notes, the timing and character of gain or loss with respect to the Notes may differ. No ruling will be requested from the IRS with respect to the Notes and no assurance can be given that the IRS will agree with the statements made in the section entitled "U.S. Federal Income Tax Summary." You are urged to consult with your own tax advisor regarding all aspects of the U.S. federal income tax consequences of investing in the Notes.
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AUTO-CALLABLE NOTES | PS-10
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AUTO-CALLABLE NOTES | PS-11
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AUTO-CALLABLE NOTES | PS-12
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AUTO-CALLABLE NOTES | PS-13
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AUTO-CALLABLE NOTES | PS-14
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AUTO-CALLABLE NOTES | PS-15
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AUTO-CALLABLE NOTES | PS-16
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AUTO-CALLABLE NOTES | PS-17
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AUTO-CALLABLE NOTES | PS-18
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AUTO-CALLABLE NOTES | PS-19
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Product Supplement EQUITY-1 dated December 30, 2022:
https://www.sec.gov/Archives/edgar/data/1682472/000119312522315473/d429684d424b2.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 |
AUTO-CALLABLE NOTES | PS-20
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