BofA Finance LLC has filed preliminary pricing documentation for Contingent Income Issuer Callable Yield Notes linked to the performance of the State Street SPDR S&P Regional Banking ETF and the Technology Select Sector SPDR ETF, with an expected pricing date of August 7, 2026. The notes, guaranteed by Bank of America Corporation, offer a contingent coupon rate of 15.50% per annum payable monthly if both underlying ETFs remain above 70% of their starting values. The offering is structured as a callable note with an approximate 18-month maturity and carries full downside exposure to the worst-performing underlying if either ETF declines more than 30% from its starting value.

Key Points

  • NYSE: MER-PK
  • BofA Finance announced preliminary pricing for callable structured notes linked to the State Street SPDR S&P Regional Banking ETF and Technology Select Sector SPDR ETF, expected to price August 7, 2026 and issue August 12, 2026
  • Contingent coupon rate of 15.50% per annum (1.2917% monthly) payable only if both underlyings trade above 70% of starting value; principal repayment subject to 1:1 downside exposure if either underlying declines more than 30%
  • Notes callable monthly by issuer starting November 13, 2026; maturity date February 10, 2028; public offering price $1,000 per note with $2.50 underwriting discount

Pricing Terms and Offering Structure

The preliminary pricing supplement discloses that the Notes are expected to price on August 7, 2026, and issue on August 12, 2026, with a maturity date of February 10, 2028. The public offering price is set at $1,000.00 per note with an underwriting discount of $2.50 per note, resulting in proceeds before expenses to BofA Finance of $997.50 per $1,000.00 in principal amount. The notes will be issued in minimum denominations of $1,000 and whole multiples thereof. The filing states that the initial estimated value of the Notes as of the pricing date is expected to be between $915.00 and $965.00 per $1,000.00 in principal amount, which the disclosure notes is less than the public offering price.

Certain dealers who purchase the Notes for sale to fee-based advisory accounts may forgo some or all of their selling concessions, with the public offering price potentially as low as $997.50 per $1,000.00 in principal amount for those accounts. In addition to the underwriting discount, an affiliate of BofA Finance will pay a referral fee of up to $6.75 per $1,000.00 in principal amount of the Notes in connection with distribution to other registered broker-dealers. The Notes will not be listed on any securities exchange and carry a CUSIP number of 09712GJR6.

Monthly Contingent Coupon Payment Structure

The Notes provide a contingent coupon rate of 15.50% per annum, payable monthly at a rate of 1.2917% per month. However, this coupon payment is conditional on the performance of both underlying ETFs. The disclosure specifies that contingent coupon payments will be made only if, on any monthly Observation Date, the Observation Value of each Underlying is greater than or equal to its Coupon Barrier of 70.00% of its Starting Value. This means that both the Regional Banking ETF and the Technology ETF must remain above 70% of their starting values for investors to receive the coupon payment.

Contingent Coupon Payments are scheduled for specified Contingent Payment Dates, which include each Call Payment Date and the Maturity Date. The payment amount per $1,000.00 in principal amount is $12.917 on the applicable Contingent Payment Date. If either underlying falls below the 70% coupon barrier on any observation date, investors will not receive a coupon payment for that period, even though they retain their principal investment. The structure effectively creates a binary outcome on each observation date: investors either receive the full 1.2917% monthly payment or receive nothing, depending on whether both underlyings maintain the threshold level.

Callable Feature and Early Redemption Rights

Beginning on November 13, 2026, BofA Finance retains the right to redeem all (but not less than all) of the Notes at its option on any monthly Call Payment Date. The Early Redemption Amount equals $1,000.00 per $1,000.00 in principal amount of Notes, plus the applicable Contingent Coupon Payment if the Observation Value of each Underlying on the corresponding Observation Date is greater than or equal to its Coupon Barrier. The issuer must provide notice to the trustee at least five business days but not more than 60 calendar days before the applicable Call Payment Date for such redemption.

This callable feature gives the issuer significant control over the duration of the investment. If the underlying ETFs perform well and the contingent coupons are being paid, the issuer may choose to call the notes and terminate the obligation to make further payments. Conversely, if market conditions become unfavorable, the issuer benefits from the option without obligation. Once called, no further payments will be made to noteholders, meaning investors cannot rely on receiving the full 18-month stream of contingent coupons even if conditions warrant them.

Downside Risk and Loss of Principal Scenarios

The Notes expose investors to significant downside risk if either underlying ETF declines substantially. The disclosure states that assuming the Notes are not called prior to maturity, if either Underlying declines by more than 30% from its Starting Value, at maturity investors will have 1:1 downside exposure to decreases in the value of the Least Performing Underlying, with up to 100% of the principal at risk. This means that the redemption amount at maturity will be calculated based on whichever of the two ETFs performs worse, and if that ETF has fallen more than 30%, investors absorb the full percentage decline from the 30% threshold down to zero.

Conversely, if the Ending Value of the Least Performing Underlying is greater than or equal to its Threshold Value of 70.00% of its Starting Value, investors will receive their full principal amount at maturity. The filing emphasizes that in downside scenarios where the Least Performing Underlying falls below the Threshold Value, the Redemption Amount excluding any final Contingent Coupon Payment will be less than 70.00% of the principal amount, and investors could lose up to 100.00% of their investment. Additionally, even at maturity, investors will only receive a final Contingent Coupon Payment if the Ending Value of the Least Performing Underlying is greater than or equal to its Coupon Barrier of 70.00%.

Underlying ETF References and Performance Calculation

The Notes are linked to two State Street SPDR exchange-traded funds: the S&P Regional Banking ETF (Bloomberg symbol "KRE") and the Technology Select Sector SPDR ETF (Bloomberg symbol "XLK"). With respect to each Underlying, the Starting Value is defined as its Closing Market Price on the pricing date of August 7, 2026. The Observation Value for each Underlying is its Closing Market Price on the applicable Observation Date, multiplied by its Price Multiplier, which is set at 1 subject to adjustment for certain events relating to that Underlying.

The filing discloses that the Ending Value of each Underlying is its Observation Value on the Valuation Date of February 7, 2028, subject to postponement as described in the product supplement. The document specifies that the Least Performing Underlying is determined as the Underlying with the lowest Underlying Return. This structure ensures that the final redemption amount is determined by the ETF that has performed worse relative to its starting price, creating an asymmetric payoff where negative performance of either fund directly impacts investor returns at maturity.

Guarantee and Credit Risk Considerations

All payments on the Notes are subject to the credit risk of BofA Finance LLC as issuer of the Notes and Bank of America Corporation as guarantor of the Notes. Bank of America Corporation provides a full and unconditional guarantee of the Notes, meaning that if BofA Finance encounters financial difficulty, BAC is obligated to honor all payment obligations. However, this guarantee does not eliminate credit risk entirely; it effectively substitutes the credit quality of Bank of America Corporation for that of BofA Finance LLC.

The disclosure prominently states that the Notes are not FDIC insured, are not bank guaranteed in the traditional sense, and may lose value. Despite the guarantee from a major financial institution, investors bear credit risk associated with Bank of America Corporation's financial condition. This distinguishes the Notes from traditional bank deposits, which would benefit from FDIC insurance protections. The filing indicates that in the event of an Event of Default with respect to the Notes, as defined in the senior indenture, any acceleration permitted would result in a payment equal to the Redemption Amount calculated as though the date of acceleration were the Maturity Date.

Anti-Dilution Adjustments and Calculation Methodology

The Notes incorporate provisions for anti-dilution and discontinuance adjustments relating to the ETFs. The Price Multiplier with respect to each Underlying is set at 1, subject to adjustment for certain events relating to that Underlying as described in the product supplement section entitled "Description of the Notes—Anti-Dilution and Discontinuance Adjustments Relating to ETFs." The disclosure notes this section begins on page PS-23 of the accompanying product supplement, indicating that adjustments may be made to account for corporate actions, splits, or other events affecting the underlying ETFs.

BofA Securities, Inc., an affiliate of BofA Finance, serves as the Calculation Agent responsible for determining the relevant values and payment amounts throughout the life of the Notes. This affiliation creates a potential conflict of interest, as the Calculation Agent is affiliated with the issuer. The accuracy and methodology of these calculations will be critical to determining both coupon payments and final redemption amounts, as all Observation Values depend on calculations performed by this affiliated entity according to the terms specified in the product supplement.

Risk Factors and Structural Complexities

The pricing supplement directs potential purchasers to review Risk Factors beginning on page PS-9 of the pricing supplement, page PS-3 of the accompanying product supplement, page S-7 of the accompanying prospectus supplement, and page 7 of the accompanying prospectus. The disclosure notes that there are important differences between these Notes and conventional debt securities, warranting careful consideration of the risk sections before investment.

The filing indicates that the actual value of the Notes at any time will reflect many factors and cannot be predicted with accuracy. The disclosure specifies under "Structuring the Notes" on page PS-21 of the pricing supplement additional information regarding the composition and design of these structured products. The Notes' value depends not only on the performance of two underlying ETFs but also on volatility, interest rate movements, and the creditworthiness of the guarantor, making valuation complex and dynamic throughout the holding period.

Regulatory Status and Distribution Information

The preliminary pricing supplement is filed pursuant to Rule 424(b)(2) under the Securities Act of 1933, relating to Registration Statement Nos. 333-290665 and 333-290665-01. The disclosure relates to an effective Registration Statement and references a Prospectus dated December 8, 2025, Series A Prospectus Supplement dated December 8, 2025, and Product Supplement EQUITY-1 dated December 8, 2025. The document is marked as a Preliminary Pricing Supplement subject to completion, indicating that final terms may differ from those disclosed in this preliminary filing.

BofA Securities, Inc. is identified as the selling agent for the Notes. The filing includes a standard regulatory notice stating that none of the Securities and Exchange Commission, any state securities commission, or any other regulatory body has approved or disapproved of these securities or determined if the pricing supplement and accompanying documents are truthful or complete, with a note that any representation to the contrary is a criminal offense. This language reflects standard disclosure requirements and regulatory protocol for new structured product offerings.