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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Bank of America Corporation | NYSE:BAC | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.38 | 1.03% | 37.26 | 37.53 | 37.08 | 37.25 | 33,945,300 | 21:28:16 |
Filed Pursuant to Rule 424(b)(2)
Registration Statement No. 333-213265 (To Prospectus dated November 4, 2016, Prospectus Supplement dated November 4, 2016 and Product Supplement EQUITY INDICES LIRN-1 dated November 28, 2016) |
1,282,462 Units $10 principal amount per unit CUSIP No. 097096275 |
Pricing Date Settlement Date Maturity Date |
February 23, 2017 March 2, 2017 February 22, 2019 |
|||
BofA Finance LLC
Capped Leveraged Index Return Notes
®
Linked to the EURO STOXX 50
®
Index
Fully and Unconditionally Guaranteed by Bank of America Corporation
■
Maturity of approximately two years
■
2-to-1 upside exposure to increases in the Index, subject to a capped return of 25.90%
■
1-to-1 downside exposure to decreases in the Index beyond a 10.00% decline, with up to 90.00% of your principal at risk
■
All payments occur at maturity and are subject to the credit risk of BofA Finance LLC, as issuer of the notes, and the credit risk of Bank of America Corporation, as guarantor of the notes
■
No periodic interest payments
■
In addition to the underwriting discount set forth below, the notes include a hedging-related charge of $0.075 per un
it. See Structuring the Notes
■
Limited secondary market liquidity, with no exchange listing
|
|||||
Per Unit
|
Total
|
|
Public offering price
|
$
10.00
|
$
12,824,620.00
|
Underwriting discount
|
$
0.20
|
$
256,492.40
|
Proceeds, before expenses, to
BofA Finance
|
$
9.80
|
$
12,568,127.60
|
Are Not FDIC Insured
|
Are Not Bank Guaranteed
|
May Lose Value
|
Capped Leveraged Index Return Notes
®
Linked to the EURO STOXX 50 ® Index, due February 22, 2019 |
|
Capped Leveraged Index Return Notes
®
|
TS-
2
|
Capped Leveraged Index Return Notes
®
Linked to the EURO STOXX 50 ® Index, due February 22, 2019 |
|
■
|
Product supplement EQUITY INDICES LIRN-1 dated
November
2
8
, 2016:
http://www.sec.gov/Archives/edgar/data/70858/000119312516778251/d301984d424b5.htm ">https://www.sec.gov/Archives/edgar/data/70858/000119312516778251/d301984d424b5.htm |
■
|
Series
A
MTN prospectus supplement dated
November
4
, 2016 and prospectus dated
November
4
, 201
6
:
http://www.sec.gov/Archives/edgar/data/70858/000119312516760144/d266649d424b3.htm ">https://www.sec.gov/Archives/edgar/data/70858/000119312516760144/d266649d424b3.htm |
You may wish to consider an investment in the notes if:
|
The notes may not be an appropriate investment for you if:
|
■
You anticipate that the Index will increase moderately from the Starting Value to the Ending Value.
■
You are willing to risk a loss of principal and return if the Index decreases from the Starting Value to an Ending Value that is below the Threshold Value.
■
You accept that the return on the notes will be capped.
■
You are willing to forgo the interest payments that are paid on conventional interest bearing debt securities.
■
You are willing to forgo dividends or other benefits of owning the stocks included in the Index.
■
You are willing to accept a limited or no market for sales prior to maturity, and understand that the market prices for the notes, if any, will be affected by various factors, including our and BAC
’
s actual and perceived creditworthiness, BAC
’
s internal funding rate and fees and charges on the notes.
■
You are willing to assume our credit risk, as issuer of the notes, and BAC
’
s credit risk, as guarantor of the notes, for all payments under the notes, including the Redemption Amount.
|
■
You believe that the Index will decrease from the Starting Value to the Ending Value or that it will not increase sufficiently over the term of the notes to provide you with your desired return.
■
You seek 100% principal repayment or preservation of capital.
■
You seek an uncapped return on your investment.
■
You seek interest payments or other current income on your investment.
■
You want to receive dividends or other distributions paid on the stocks included in the Index.
■
You seek an investment for which there will be a liquid secondary market.
■
You are unwilling or are unable to take market risk on the notes
,
to take our credit risk
,
as issuer of the notes
,
or to take BAC
’
s credit risk, as guarantor of the notes.
|
Capped Leveraged Index Return Notes
®
|
TS-
3
|
Capped Leveraged Index Return Notes
®
Linked to the EURO STOXX 50 ® Index, due February 22, 2019 |
|
Capped Leveraged Index Return Notes
|
This graph reflects the returns on the notes, based on the Participation Rate of 200%, the Threshold Value of 90% of the Starting Value and the Capped Value of $12.59. The green line reflects the returns on the notes, while the dotted gray line reflects the returns of a direct investment in th
e stocks included in the Index, excluding dividends.
This graph has been prepared for purposes of illustration only.
|
Ending Value
|
Percentage Change from the Starting Value to the Ending Value
|
Redemption Amount per Unit
|
Total Rate of Return on the Notes
|
0.00
|
-100.00%
|
$1.00
|
-90.00%
|
50.00
|
-50.00%
|
$6.00
|
-40.00%
|
80.00
|
-20.00%
|
$9.00
|
-10.00%
|
90.00
(1)
|
-10.00%
|
$10.00
|
0.00%
|
94.00
|
-6.00%
|
$10.00
|
0.00%
|
95.00
|
-5.00%
|
$10.00
|
0.00%
|
97.00
|
-3.00%
|
$10.00
|
0.00%
|
100.00
(2)
|
0.00%
|
$10.00
|
0.00%
|
102.00
|
2.00%
|
$10.40
|
4.00%
|
105.00
|
5.00%
|
$11.00
|
10.00%
|
110.00
|
10.00%
|
$12.00
|
20.00%
|
120.00
|
20.00%
|
$12.59
(3)
|
25.90%
|
130.00
|
30.00%
|
$12.59
|
25.90%
|
140.00
|
40.00%
|
$12.59
|
25.90%
|
150.00
|
50.00%
|
$12.59
|
25.90%
|
160.00
|
60.00%
|
$12.59
|
25.90%
|
(1)
|
This is the
hypothetical
Threshold Value.
|
(2)
|
The
hypothetical
Starting Value of 100 used in these examples has been chosen for illustrative purposes only. The actual Starting Value is 3,333.96 which was the closing level of the Market Measure on the pricing date.
|
(3)
|
The Redemption Amount per unit cannot exceed the Capped Value.
|
Capped Leveraged Index Return Notes
®
|
TS-
4
|
Capped Leveraged Index Return Notes
®
Linked to the EURO STOXX 50 ® Index, due February 22, 2019 |
|
Example 1
|
|
The Ending Value is 80.00, or 80.00% of the Starting Value:
|
|
Starting Value:
100.00
|
|
Threshold Value:
90.00
|
|
Ending Value:
80.00
|
|
|
Redemption Amount per unit
|
Example 2
|
The Ending Value is 95.00, or 95.00% of the Starting Value:
|
Starting Value:
100.00
|
Threshold Value:
90.00
|
Ending Value:
95.00
|
Redemption Amount (per unit)
= $10.00
, the principal amount, since the Ending Value is less than the Starting Value but equal to or greater than the Threshold Value.
|
Example 3
|
|
The Ending Value is 105.00, or 105.00% of the Starting Value:
|
|
Starting Value:
100.00
|
|
Ending Value:
105.00
|
|
|
= $11.00
Redemption Amount per unit
|
Example 4
|
|
The Ending Value is 130.00, or 130.00% of the Starting Value:
|
|
Starting Value:
100.00
|
|
Ending Value:
130.00
|
|
|
= $16.00, however, because the Redemption Amount for the notes cannot exceed the Capped Value, the Redemption Amount will be $12.59 per unit
|
Capped Leveraged Index Return Notes
®
|
TS-
5
|
Capped Leveraged Index Return Notes
®
Linked to the EURO STOXX 50 ® Index, due February 22, 2019 |
|
■
|
Depending on the performance of the Index as measured shortly before the maturity date, your investment may result in a loss; there is no guaranteed return of principal.
|
■
|
Your return on the notes may be less than the yield you could earn by owning a conventional fixed or floating rate debt security of comparable maturity.
|
■
|
Payments on the notes are subject to our credit risk, and the credit risk of BAC, and actual or perceived changes in our or BAC’s creditworthiness are expected to affect the value of the notes. If we and BAC become insolvent or are unable to pay our respective obligations, you may lose your entire investment.
|
■
|
Your investment return is limited to the return represented by the Capped Value and may be less than a comparable investment directly in the stocks included in the Index.
|
■
|
We are a finance subsidiary and, as such, will have limited assets and operations.
|
■
|
BAC’s obligations under its guarantee of the notes will be structurally subordinated to liabilities of its subsidiaries
|
■
|
The notes issued by us will not have the benefit of any cross-default or cross-acceleration with other indebtedness of BofA Finance or BAC; events of bankruptcy or insolvency or resolution proceedings relating to BAC and covenant breach by BAC will not constitute an event of default with respect to the notes
|
■
|
The initial estimated value of the notes
considers certain assumptions and variables and relies in part on certain forecasts about future events, which may prove to be incorrect. The initial estimated value of the notes
is an estimate only, determined as of 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 BAC, BAC’s internal funding
rate on the pricing date, mid-market terms on hedging transactions, expectations on interest rates and volatility, price-sensitivity analysis, and the expected term of the notes. These pricing models rely in part on certain forecasts about future events, which may prove to be incorrect.
|
■
|
The public offering price you pay for the notes
exceeds
the initial estimated value. If you attempt to sell the notes prior to maturity, their market value may be lower than the price you paid for them and lower than the initial estimated value. This is due to, among other things, changes in the
level of the Index
,
BAC’s internal funding rate
, and the inclusion in the public offering price of the underwriting discount and the hedging related charge, all as further described in Structuring the Notes
beginning
on page TS-
10
. 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,
MLPF&S or any of our
other
affiliates would be willing to purchase your notes in any secondary market (if any exists) at any time. The value of your notes at any time after issuance will vary based on many factors that cannot be predicted with accuracy, including the performance of the
Index
, our
and BAC’s
creditworthiness and changes in market conditions.
|
■
|
A trading market is not expected to develop for the notes.
None of us, BAC or
MLPF&S is obligated to make a market for, or to repurchase, the notes. There is no assurance that any party will be willing to purchase your notes at any price in any secondary market.
|
■
|
Your return on the notes may be affected by factors affecting the international securities markets, specifically changes within the Eurozone. The Eurozone is and has been undergoing severe financial stress, and the political, legal and regulatory ramifications are impossible to predict. Changes within the Eurozone could adversely affect the performance of the Index and, consequently, the value of the notes. In addition, you will not obtain the benefit of any increase in the value of the euro against the U.S. dollar, which you would have received if you had owned the securities in the Index during the term of your notes, although the level of the Index may be adversely affected by general exchange rate movements in the market.
|
■
|
BAC and its affiliates’ hedging and trading activities (including trades in shares of companies included in the Index) and any hedging and trading activities BAC or its affiliates engage in that are not for your account or on your behalf, may affect the market value and return of the notes and may create conflicts of interest with you.
|
■
|
The Index sponsor may adjust the Index in a way that affects its level, and has no obligation to consider your interests.
|
■
|
You will have no rights of a holder of the securities represented by the Index, and you will not be entitled to receive securities or dividends or other distributions by the issuers of those securities.
|
Capped Leveraged Index Return Notes
®
|
TS-
6
|
Capped Leveraged Index Return Notes
®
Linked to the EURO STOXX 50 ® Index, due February 22, 2019 |
|
■
|
While BAC and our other affiliates may from time to time own securities of companies included in the Index, BAC and our other affiliates do not control any company included in the Index, and are not responsible for any disclosure made by any other company.
|
■
|
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.
|
■
|
The U.S. federal income tax consequences of the notes are uncertain, and may be adverse to a holder of the notes. See Summary Tax Consequences below and U.S. Federal Income Tax Summary beginning on page PS-27 of product supplement EQUITY INDICES LIRN-1.
|
Capped Leveraged Index Return Notes
®
|
TS-
7
|
Capped Leveraged Index Return Notes
®
Linked to the EURO STOXX 50 ® Index, due February 22, 2019 |
|
Capped Leveraged Index Return Notes
®
|
TS-
8
|
Capped Leveraged Index Return Notes
®
Linked to the EURO STOXX 50 ® Index, due February 22, 2019 |
|
●
|
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 Index or have any obligation to do so.
|
●
|
STOXX, Deutsche Borse Group and their licensors, research partners or data providers do not give any warranty, express or implied, and exclude any liability about:
|
Capped Leveraged Index Return Notes
®
|
TS-
9
|
Capped Leveraged Index Return Notes
®
Linked to the EURO STOXX 50 ® Index, due February 22, 2019 |
|
●
|
STOXX, Deutsche Borse Group and their licensors, research partners or data providers give no warranty and exclude any liability, for any errors, omissions or interruptions in the Index or its data;
|
■
|
Under no circumstances will STOXX, Deutsche Borse 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 Index or its data or generally in relation to the notes, even in circumstances where STOXX, Deutsche Borse Group or their licensors, research partners or data providers are aware that such loss or damage may occur.
|
Capped Leveraged Index Return Notes
®
|
TS-
10
|
Capped Leveraged Index Return Notes
®
Linked to the EURO STOXX 50 ® Index, due February 22, 2019 |
|
■
|
There is no statutory, judicial, or administrative authority directly addressing the characterization of the notes.
|
■
|
You agree with us (in the absence of an administrative determination, or judicial ruling to the contrary) to characterize and treat the notes for all tax purposes as a single financial contract with respect to the
Index.
|
■
|
Under this characterization and tax treatment of the notes, a U.S. Holder (as defined beginning
on page 50
of the prospectus
) generally will recognize capital gain or loss upon maturity or upon a sale or exchange of the notes prior to maturity. This capital gain or loss generally will be long-term capital gain or loss if you held the notes for more than one year.
|
■
|
No assurance can be given that the
IRS
or any court will agree with this characterization and tax treatment.
|
■
|
The IRS has issued guidance that states that the U.S. Treasury Department and the IRS intend to amend the effective dates of the U.S. Treasury regulations to provide that withholding on dividend equivalent payments (as discussed in the product supplement), if any, will not apply to specified ELIs that are not delta-one instruments and that are issued before January 1, 2018.
|
Capped Leveraged Index Return Notes
®
|
TS-
11
|
Capped Leveraged Index Return Notes
®
Linked to the EURO STOXX 50 ® Index, due February 22, 2019 |
|
Capped Leveraged Index Return Notes
®
|
TS-
12
|
1 Year Bank of America Chart |
1 Month Bank of America Chart |
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