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Name | Symbol | Market | Type |
---|---|---|---|
Bank of America Corporation | NYSE:BML-G | NYSE | Preference Share |
Price Change | % Change | Price | High Price | Low Price | Open Price | Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.09 | 0.40% | 22.69 | 22.78 | 22.58 | 22.65 | 5,033 | 21:15:00 |
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Filed Pursuant to Rule 424(b)(2)
Registration Statement No. 333-234425 (To Prospectus dated December 31, 2019, Prospectus Supplement dated December 31, 2019 and Product Supplement COMM LIRN-1 dated July 15, 2021) |
450,000 Units
$10 principal amount per unit CUSIP No. 09710F827 |
Pricing Date
Settlement Date Maturity Date |
August 18, 2022
August 25, 2022 August 25, 2025 |
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BofA Finance LLC
Leveraged Index Return Notes® Linked to the Bloomberg ex-Energy SubindexSM
Fully and Unconditionally Guaranteed by Bank of America Corporation
■
Maturity of approximately three years
■
158.00% leveraged upside exposure to increases in the Index
■
1-to-1 downside exposure to decreases in the Index, with up to 100.00% 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
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No periodic interest payments
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In addition to the underwriting discount set forth below, the notes include a hedging-related charge of $0.075 per unit. See Structuring the Notes.
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Limited secondary market liquidity, with no exchange listing
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Per Unit
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Total
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Public offering price
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$10.00
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$4,500,000.00
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Underwriting discount
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$0.06
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$27,000.00
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Proceeds, before expenses, to BofA Finance
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$9.94
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$4,473,000.00
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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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Leveraged Index Return Notes®
Linked to the Bloomberg ex-Energy SubindexSM, due August 25, 2025 |
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Terms of the Notes
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Redemption Amount Determination
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Issuer:
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BofA Finance LLC (BofA Finance)
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On the maturity date, you will receive a cash payment per unit determined as follows:
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Guarantor:
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Bank of America Corporation (BAC)
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Principal Amount:
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$10.00 per unit
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Term:
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Approximately three years
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Market Measure:
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The Bloomberg ex-Energy SubindexSM (Bloomberg symbol: BCOMXE)
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Starting Value:
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111.3969. As a result of a Market Disruption Event that occurred on the pricing date with respect to Lean Hogs (which is a component of the BCOMXE), the Starting Value has been determined based on the exchange published settlement price or other applicable price of Lean Hogs on August 19, 2022 and the exchange published settlement price or other applicable price of each other component of the BCOMXE on the pricing date, as described beginning on page PS-21 of the accompanying product supplement.
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Ending Value:
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The closing level of the Market Measure on the scheduled calculation day. The calculation day is subject to postponement in the event of Market Disruption Events, as described beginning on page PS-22 of the accompanying product supplement.
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Threshold Value:
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111.3969, which is 100.00% of the Starting Value.
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Participation Rate:
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158.00%
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Calculation Day:
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August 18, 2025
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Fees and Charges:
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The underwriting discount of $0.06 per unit listed on the cover page and the hedging related charge of $0.075 per unit described in Structuring the Notes on page TS-17.
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Calculation Agent:
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BofA Securities Inc. (BofAS), an affiliate of BofA Finance.
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Leveraged Index Return Notes®
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TS-2
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Leveraged Index Return Notes®
Linked to the Bloomberg ex-Energy SubindexSM, due August 25, 2025 |
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●
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Product supplement COMM LIRN-1 dated July 15, 2021:
https://www.sec.gov/Archives/edgar/data/70858/000119312521216586/d218238d424b5.htm |
●
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Series A MTN prospectus supplement dated December 31, 2019 and prospectus dated December 31, 2019:
https://www.sec.gov/Archives/edgar/data/70858/000119312519326462/d859470d424b3.htm |
You may wish to consider an investment in the notes if:
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The notes may not be an appropriate investment for you if:
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■
You anticipate that the Index will increase from the Starting Value to the Ending Value.
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You are willing to risk a loss of principal and return if the Index decreases from the Starting Value to the Ending Value.
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You are willing to forgo the interest payments that are paid on conventional interest bearing debt securities.
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You are willing to forgo the rights and benefits of owning the commodities or futures contracts included in, or tracked by, the Index.
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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.
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You are willing to assume our credit risk, as issuer of the notes, and BAC’s credit risk, as guarantor of the notes, for all payments under the notes, including the Redemption Amount.
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■
You 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.
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You seek 100% principal repayment or preservation of capital.
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You seek interest payments or other current income on your investment.
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You want to receive the rights and benefits of owning the commodities or futures contracts included in, or tracked by, the Index.
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You seek an investment for which there will be a liquid secondary market.
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You are unwilling or are unable to take market risk on the notes, to take our credit risk, as issuer of the notes, or to take BAC’s credit risk, as guarantor of the notes.
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Leveraged Index Return Notes®
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TS-3
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Leveraged Index Return Notes®
Linked to the Bloomberg ex-Energy SubindexSM, due August 25, 2025 |
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Leveraged Index Return Notes®
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This graph reflects the returns on the notes, based on the Participation Rate of 158.00% and a Threshold Value of 100% of the Starting Value. The green line reflects the returns on the notes, while the dotted gray line reflects the returns of a direct investment in the components of the Index.
This graph has been prepared for purposes of illustration only.
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Ending Value
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Percentage Change from the Starting Value to the Ending Value
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Redemption Amount per Unit(1)
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Total Rate of Return on the Notes
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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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50.00
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-50.00%
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$5.00
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-50.00%
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75.00
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-25.00%
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$7.50
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-25.00%
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80.00
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-20.00%
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$8.00
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-20.00%
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85.00
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-15.00%
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$8.50
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-15.00%
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90.00
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-10.00%
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$9.00
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-10.00%
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95.00
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-5.00%
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$9.50
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-5.00%
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97.00
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-3.00%
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$9.70
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-3.00%
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100.00(2)(3)
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0.00%
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$10.00
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0.00%
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105.00
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5.00%
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$10.79
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7.90%
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110.00
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10.00%
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$11.58
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15.80%
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120.00
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20.00%
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$13.16
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31.60%
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140.00
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40.00%
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$16.32
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63.20%
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160.00
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60.00%
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$19.48
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94.80%
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180.00
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80.00%
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$22.64
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126.40%
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200.00
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100.00%
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$25.80
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158.00%
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(1)
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The Redemption Amount per unit is based on the Participation Rate.
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(2)
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This is the hypothetical Threshold Value.
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(3)
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The hypothetical Starting Value of 100 used in these examples has been chosen for illustrative purposes only. The actual Starting Value for the Index is 111.3969. See "Starting Value" on page TS-2 above.
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Leveraged Index Return Notes®
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TS-4
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Leveraged Index Return Notes®
Linked to the Bloomberg ex-Energy SubindexSM, due August 25, 2025 |
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Example 1
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The Ending Value is 50.00, or 50.00% of the Starting Value:
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Starting Value: 100.00
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Threshold Value: 100.00
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Ending Value: 50.00
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Redemption Amount per unit
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Example 2
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The Ending Value is 105.00, or 105.00% of the Starting Value:
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Starting Value: 100.00
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Ending Value: 105.00
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= $10.79 Redemption Amount per unit.
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Leveraged Index Return Notes®
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TS-5
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Leveraged Index Return Notes®
Linked to the Bloomberg ex-Energy SubindexSM, due August 25, 2025 |
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■
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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.
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■
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Your return on the notes may be less than the yield you could earn by owning a conventional fixed or floating rate debt security of comparable maturity.
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Payments on the notes are subject to our credit risk, and the credit risk of BAC, and actual or perceived changes in our or BAC’s creditworthiness are expected to affect the value of the notes. If we and BAC become insolvent or are unable to pay our respective obligations, you may lose your entire investment.
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Your investment return may be less than a comparable investment directly in the components of the Index.
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We are a finance subsidiary and, as such, will have limited assets and operations.
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BAC’s obligations under its guarantee of the notes will be structurally subordinated to liabilities of its subsidiaries.
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The notes issued by us will not have the benefit of any cross-default or cross-acceleration with other indebtedness of BofA Finance or BAC: events of bankruptcy or insolvency or resolution proceedings relating to BAC and covenant breach by BAC will not constitute an event of default with respect to the notes.
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The initial estimated value of the notes considers certain assumptions and variables and relies in part on certain forecasts about future events, which may prove to be incorrect. The initial estimated value of the notes is an estimate only, determined as of the pricing date by reference to our and our affiliates’ pricing models. These pricing models consider certain assumptions and variables, including our credit spreads, and those of BAC, BAC’s internal funding rate on the pricing date, mid-market terms on hedging transactions, expectations on interest rates and volatility, price-sensitivity analysis, and the expected term of the notes. These pricing models rely in part on certain forecasts about future events, which may prove to be incorrect.
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The public offering price you are paying for the notes exceeds the initial estimated value. If you attempt to sell the notes prior to maturity, their market value may be lower than the price you paid for them and lower than the initial estimated value. This is due to, among other things, changes in the level of the Index, changes in 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 on page TS-17. 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, MLPF&S, BofAS or any of our other affiliates would be willing to purchase your notes in any secondary market (if any exists) at any time. The value of your notes at any time after issuance will vary based on many factors that cannot be predicted with accuracy, including the performance of the Index, our and BAC’s creditworthiness and changes in market conditions.
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■
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A trading market is not expected to develop for the notes. None of us, BAC, MLPF&S or BofAS is obligated to make a market for, or to repurchase, the notes. There is no assurance that any party will be willing to purchase the notes at any price in any secondary market.
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BAC and its affiliates' hedging and trading activities (including trades related to components of 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 ad return of the notes and may create conflicts of interest with you.
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There may be potential conflicts of interest involving the calculation agent, which is an affiliate of ours. We have the right to appoint and remove the calculation agent.
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■
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Bloomberg Index Services Limited may adjust the Index in a way that affects its level, and has no obligation to consider your interests.
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■
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Future prices of the Index components that are different from their current prices may have a negative effect on the level of the Index, and therefore the value of the notes.
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Leveraged Index Return Notes®
|
TS-6
|
Leveraged Index Return Notes®
Linked to the Bloomberg ex-Energy SubindexSM, due August 25, 2025 |
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■
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Ownership of the notes will not entitle you to any rights with respect to any commodities or futures contracts included in, or tracked by, the Index.
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■
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An investment linked to commodity futures contracts is not equivalent to an investment linked to the spot prices of physical commodities.
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■
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The notes will not be regulated by the U.S. Commodity Futures Trading Commission.
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■
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The Index includes futures contracts traded on foreign exchanges that are less regulated than U.S. markets and may involve different and greater risks than trading on U.S. exchanges.
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■
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Suspensions or disruptions of market trading in the commodities or futures contracts included in, or tracked by, the Index may adversely affect the value of the notes.
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■
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Legal and regulatory changes could adversely affect the return on and value of your notes.
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■
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The U.S. federal income tax consequences of the notes are uncertain, and may be adverse to a holder of the notes. See Summary Tax Consequences below and U.S. Federal Income Tax Summary beginning on page PS-28 of the accompanying product supplement
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Leveraged Index Return Notes®
|
TS-7
|
Leveraged Index Return Notes®
Linked to the Bloomberg ex-Energy SubindexSM, due August 25, 2025 |
|
Leveraged Index Return Notes®
|
TS-8
|
Leveraged Index Return Notes®
Linked to the Bloomberg ex-Energy SubindexSM, due August 25, 2025 |
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●
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The product, risk and operations committee provides direct governance and is responsible for the first line of controls over the creation, design, production and dissemination of benchmark indices, strategy indices and fixings administered by BISL, including the BCOM Index. The product, risk and operations committee is composed of Bloomberg personnel with significant experience or relevant expertise in relation to financial benchmarks. Meetings are attended by Bloomberg legal & compliance personnel. Nominations and removals are subject to review by Bloomberg’s benchmark oversight committee, discussed below.
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●
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The oversight function is provided by the benchmark oversight committee. The benchmark oversight committee is independent of the product, risk and operations committee and is responsible for reviewing and challenging the activities carried out by the product, risk and operations committee. In carrying out its oversight duties, the benchmark oversight committee receives reports of management information both from the product, risk and operations committee as well as Bloomberg legal and compliance members engaged in second level controls.
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Leveraged Index Return Notes®
|
TS-9
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Leveraged Index Return Notes®
Linked to the Bloomberg ex-Energy SubindexSM, due August 25, 2025 |
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Commodity
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Designated Contract
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Trading Facility
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2022 Final Commodity Index Percentages (%)
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Aluminum
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High Grade Primary Aluminum
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LME
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4.2457680%
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Coffee
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Coffee C
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ICE Futures U.S.
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2.7333550%
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Copper
|
Copper
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COMEX
|
5.3982920%
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Corn
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Corn
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CBOT
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5.5899030%
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Cotton
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Cotton No. 2
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ICE Futures U.S.
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1.5032870%
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WTI Crude Oil
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Light, Sweet Crude Oil
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NYMEX
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8.0368820%
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Brent Crude Oil
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Oil (Brent Crude Oil)
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ICE Futures Europe
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6.9631180%
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Gold
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Gold
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COMEX
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15.0000000%
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Ultra-Low-Sulfur Diesel (Heating Oil)
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ULS Diesel (HO)
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NYMEX
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2.0526330%
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Lean Hogs
|
Lean Hogs
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CME
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1.7546500%
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Live Cattle
|
Live Cattle
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CME
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3.5807520%
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Low Sulphur Gas Oil
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Low Sulphur Gas Oil (QS)
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ICE Futures Europe
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2.6496240%
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Natural Gas
|
Henry Hub Natural Gas
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NYMEX
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7.9548670%
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Nickel
|
Primary Nickel
|
LME
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2.7134270%
|
Silver
|
Silver
|
COMEX
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4.7468930%
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Soybean Meal
|
Soybean Meal
|
CBOT
|
3.5200260%
|
Soybean Oil
|
Soybean Oil
|
CBOT
|
3.1716110%
|
Soybeans
|
Soybeans
|
CBOT
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5.7888440%
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Sugar
|
Sugar No. 11
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ICE Futures U.S.
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2.7943260%
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Unleaded Gasoline
|
Reformulated Blendstock for Oxygen Blending (RBOB) Gasoline
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NYMEX
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2.1728010%
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Wheat (Chicago)
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Soft Wheat
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CBOT
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2.8463610%
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Wheat (Kansas City HRW)
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Hard Red Winter Wheat
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CBOT
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1.6636530%
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Leveraged Index Return Notes®
|
TS-10
|
Leveraged Index Return Notes®
Linked to the Bloomberg ex-Energy SubindexSM, due August 25, 2025 |
|
Zinc
|
Special High Grade Zinc
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LME
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3.1189270%
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Commodity Group
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Commodity
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Energy:
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Crude Oil (WTI and Brent)
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ULS Diesel (HO)
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Low Sulphur Gas Oil
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Natural Gas
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Unleaded Gasoline (RBOB)
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Precious Metals:
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Gold
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Platinum
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Silver
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Industrial Metals:
|
Aluminum
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Copper
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Lead
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Nickel
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Tin
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Zinc
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Livestock:
|
Live Cattle
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Lean Hogs
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Grains:
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Corn
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Soybeans
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Soybean Meal
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Soybean Oil
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Wheat (Chicago and KC HRW)
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Softs:
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Cocoa
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Coffee
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Cotton
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Sugar
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Primary Commodity
|
Derivative Commodities
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Crude Oil (WTI and Brent)
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ULS Diesel, RBOB Gasoline and Low Sulphur Gas Oil
|
Soybeans
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Soybean Oil and Soybean Meal
|
Leveraged Index Return Notes®
|
TS-11
|
Leveraged Index Return Notes®
Linked to the Bloomberg ex-Energy SubindexSM, due August 25, 2025 |
|
●
No designated contract may constitute less than 0.4% of the BCOM Index; designated contracts which constitute less than 0.4% of the BCOM Index will be set to zero. The related contracts are not included in the BCOM Index for the related year, and none of the BCOM Index calculation procedures that follow are performed with respect to these Commodities. The disregarded interim percentages generally are allocated equally to other commodities not affected by this rule, while treating commodity sectors as one asset when distributing the excess.
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●
No single commodity together with its derivatives (together, a commodity sector) (e.g., crude oil together with ULS Diesel and unleaded gasoline or soybeans together with soybean meal and soybean oil), may constitute more than 25% of the BCOM Index. Any excess weight is generally allocated equally to other commodities not affected by this rule, while treating commodity sectors as one asset when distributing the excess.
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No single commodity (e.g., natural gas or silver) may constitute more than 15% of the BCOM Index (note that both crude oil designated contracts and both wheat designated contracts are considered together as one commodity for this purpose). Any excess weight is generally allocated equally to other commodities not affected by this rule, while treating commodity sectors as one asset when distributing the excess.
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●
No related group of commodities designated as a commodity group above (e.g., energy, precious metals, livestock, or grains) may constitute more than 33% of the BCOM Index. Any excess weight is generally allocated equally to other commodities not affected by this rule, while treating commodity sectors as one asset when distributing the excess.
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●
Gold and silver will be given a weight equal to their CLPs (subject to the 25% commodity sector and 15% commodity limits). The sum of the difference between weights based on the interim percentage and the weights based on the CLPs generally will be allocated to the other commodity sectors equally, while treating commodity sectors as one asset when subtracting the excess.
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●
No single commodity (e.g., natural gas, silver) may constitute less than 2% of the BCOM Index. If one or more single commodities have a weight less than 2% of the BCOM Index, the sum of the differences between the 2% and the actual weights generally will be allocated to the other designated contracts equally and reallocated so that no single commodity has a weight less than 2%.
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●
The ratio of the interim percentage to the CLP for a designated contract may not exceed 3.5:1. The excess weight for all affected designated contracts is aggregated, and is generally allocated equally to other commodities with such a ratio below a certain number, currently set at 2.0.
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Leveraged Index Return Notes®
|
TS-12
|
Leveraged Index Return Notes®
Linked to the Bloomberg ex-Energy SubindexSM, due August 25, 2025 |
|
●
|
termination or suspension of, or material limitation or disruption in, the trading of any futures contract or first nearby futures contract used in the calculation of the BCOM Index on that day,
|
●
|
the settlement value of any futures contract used in the calculation of the BCOM Index reflects the maximum permitted price change from the previous day’s settlement value,
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●
|
the failure of an exchange to publish official settlement values for any futures contract used in the calculation of the BCOM Index, or
|
●
|
with respect to any futures contract used in the calculation of the BCOM Index that trades on the LME, a business day on which the LME is not open for trading.
|
Leveraged Index Return Notes®
|
TS-13
|
Leveraged Index Return Notes®
Linked to the Bloomberg ex-Energy SubindexSM, due August 25, 2025 |
|
Leveraged Index Return Notes®
|
TS-14
|
Leveraged Index Return Notes®
Linked to the Bloomberg ex-Energy SubindexSM, due August 25, 2025 |
|
Leveraged Index Return Notes®
|
TS-15
|
Leveraged Index Return Notes®
Linked to the Bloomberg ex-Energy SubindexSM, due August 25, 2025 |
|
Leveraged Index Return Notes®
|
TS-16
|
Leveraged Index Return Notes®
Linked to the Bloomberg ex-Energy SubindexSM, due August 25, 2025 |
|
Leveraged Index Return Notes®
|
TS-17
|
Leveraged Index Return Notes®
Linked to the Bloomberg ex-Energy SubindexSM, due August 25, 2025 |
|
■
|
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 38 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 Internal Revenue Service (IRS) or any court will agree with this characterization and tax treatment.
|
Leveraged Index Return Notes®
|
TS-18
|
1 Year Bank of America Chart |
1 Month Bank of America Chart |
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