BofA Finance Launches Buffered Auto-Callable Notes Linked to Dow Jones, Nasdaq-100, and Russell 2000 with 30% Principal Buffer and 3-Year Term

Structure of the BofA Finance Buffered Auto-Callable Notes Offering

The notes are issued by BofA Finance LLC and are fully and unconditionally guaranteed by Bank of America Corporation. They are offered to the public at a price of $1,000.00 per note, with minimum denominations of $1,000.00 and whole multiples thereof. The preliminary pricing supplement was filed on July 14, 2026, relates to an effective Registration Statement under the Securities Act of 1933, and is filed pursuant to Rule 424(b)(2) under Registration Statement Numbers 333-290665 and 333-290665-01.

According to the disclosure, the notes are not conventional debt securities and do not pay periodic interest. Instead, returns are tied entirely to the performance of three equity indexes, with the payment at maturity or upon an automatic call determined by the least performing of the three underlying benchmarks. The filing emphasizes that there are important differences between the notes and a conventional debt security, and potential purchasers are directed to the risk factors section of the pricing supplement for a fuller understanding of the product's mechanics.

Three Underlying Indexes and the Least-Performing Mechanism Explained

The three underlyings are the Dow Jones Industrial Average (Bloomberg symbol: INDU), the Nasdaq-100 Index (Bloomberg symbol: NDX), and the Russell 2000 Index (Bloomberg symbol: RTY), each described in the filing as a price return index. The Starting Value for each underlying is its closing level on the pricing date, expected to be July 21, 2026. The Ending Value for each is its closing level on the Valuation Date of July 23, 2029, subject to postponement under the terms described in the accompanying product supplement.

The "Least Performing Underlying" is defined in the filing as the underlying with the lowest Underlying Return — that is, the index that performs worst on a percentage basis relative to its Starting Value. This mechanism means that even if two of the three indexes perform positively, a significant decline in just one index can expose investors to principal loss. This feature materially distinguishes the notes from single-index linked products, and the filing explicitly draws investor attention to this dynamic through its risk factor disclosures.

Auto-Call Feature: Annual Observation Dates Beginning July 2027

The notes include an automatic call provision that may be triggered beginning with the July 22, 2027 Call Observation Date. According to the filing, the notes will be automatically called — and an applicable Call Amount paid — if, on any Call Observation Date, the Observation Value of each Underlying is greater than or equal to its Call Value, which is set at 100.00% of each underlying's Starting Value. Call Observation Dates and the specific Call Amounts per $1,000.00 in principal are referenced in the pricing supplement but the exact schedule and amounts are listed on page PS-4 of the filing, which was not reproduced in full in the available text.

If the notes are automatically called, the applicable Call Amount will be paid on the corresponding Call Payment Date, and no further amounts will be payable following such a call. This means investors who receive an early call receive the designated Call Amount and their participation in the notes ends at that point. The automatic call applies to all — but not less than all — of the notes, meaning a partial call is not permitted under the terms described in the disclosure.

Maturity Redemption Scenarios: Principal Protection, Buffer Zone, and Loss

Assuming the notes are not called prior to maturity, the redemption outcome at maturity depends on the Ending Value of the Least Performing Underlying relative to two key thresholds: the Redemption Barrier (set at 100.00% of Starting Value) and the Threshold Value (set at 70.00% of Starting Value). The filing describes three distinct payout scenarios depending on which threshold is breached by the worst-performing index.

If the Ending Value of the Least Performing Underlying is greater than or equal to its Redemption Barrier — meaning all three indexes have at least held their starting levels — investors will receive $1,303.00 per $1,000.00 in principal at maturity, representing a fixed return above par. If the Ending Value of the Least Performing Underlying is below the Redemption Barrier but at or above the Threshold Value (i.e., between 70% and 100% of Starting Value), investors receive their full principal amount of $1,000.00 per note. If the Ending Value of the Least Performing Underlying falls below the Threshold Value — a decline exceeding 30% — investors are exposed to 1:1 downside loss beyond that 30% buffer, with up to 70% of principal at risk. The filing explicitly states that investors could lose up to 70.00% of their investment in the notes under this scenario.

Estimated Value Gap Between Offering Price and Internal Valuation

One disclosure that investors in structured notes frequently examine is the difference between the public offering price and the issuer's own internal estimated value. In this offering, the initial estimated value of the notes as of the pricing date is expected to be between $920.00 and $970.00 per $1,000.00 in principal amount of notes — meaningfully below the $1,000.00 public offering price. The filing acknowledges this gap directly and states that the actual value of the notes at any time will reflect many factors and cannot be predicted with accuracy.

This estimated value gap reflects the costs built into the structure of the notes, including the underwriting discount and the economics of the embedded options and other financial instruments used to create the payout profile. The filing directs readers to the "Structuring the Notes" section on page PS-23 of the pricing supplement for additional information on how the estimated value is derived. Understanding this gap is a standard consideration for purchasers of structured products, as it reflects the cost of the embedded features and distribution expenses that are incorporated into the public offering price from day one.

Underwriting Discount, Referral Fees, and Fee-Based Account Pricing

The filing discloses that the underwriting discount per $1,000.00 in principal amount of notes may be as high as $28.50, with proceeds before expenses to BofA Finance of as low as $971.50 per $1,000.00 in principal. BofA Securities, Inc. (BofAS), an affiliate of BofA Finance, is named as both the Calculation Agent and the Selling Agent for the offering. The filing notes that BofAS is also the calculation agent, meaning it will determine key values including the Observation Values, Ending Values, and any adjustments related to market disruption events.

Additionally, the filing discloses that an affiliate of BofA Finance will pay a referral fee of up to $3.50 per $1,000.00 in principal amount to other registered broker-dealers in connection with the distribution of the notes. For investors purchasing the notes through fee-based advisory accounts, certain dealers may forgo some or all of their selling concessions, fees, or commissions, meaning the public offering price for such investors may be as low as $971.50 per $1,000.00 in principal amount of notes. Investors purchasing through different account types may therefore face different effective costs, a distinction the filing makes explicit.

Credit Risk of BofA Finance LLC and Bank of America Corporation as Guarantor

The filing makes clear that any payment on the notes — whether at maturity, upon automatic call, or upon acceleration — is subject to the credit risk of both BofA Finance LLC as issuer and Bank of America Corporation as guarantor. The guarantee is described as full and unconditional. However, the filing also prominently states that the notes are not FDIC insured, are not bank guaranteed in the traditional deposit-insurance sense, and may lose value. These disclosures are a standard but important reminder that structured notes represent unsecured obligations of the issuer and are not protected by deposit insurance schemes.

In the event of an Event of Default as defined in the senior indenture, the filing specifies the amount payable to holders upon any acceleration permitted under the indenture. The accelerated payment would be calculated as though the date of acceleration were the Maturity Date, with the Valuation Date treated as the third Trading Day prior to the date of acceleration. If the event of default occurs on or before the Valuation Date, the payment is determined by treating the next scheduled Call Observation Date as three Trading Days prior to the acceleration date, with the applicable Call Amount pro-rated for the period elapsed since the issue date. The notes will not bear a default interest rate in the case of a default in payment.

Exchange Listing Status and Liquidity Considerations

The filing states explicitly that the notes will not be listed on any securities exchange. This is a material consideration for investors who may need or wish to sell their notes before the maturity date of July 26, 2029. Unlisted structured notes typically rely on the issuer or affiliated dealers to provide secondary market liquidity, and there is no guarantee that any secondary market will develop or, if one does exist, that it will offer pricing favorable to sellers. The filing does not provide specific commitments regarding secondary market support.

Given the absence of an exchange listing, investors should be aware that the notes are designed primarily to be held to maturity or until an automatic call event. Any attempt to liquidate the notes prior to maturity in a secondary market transaction could result in a price that is materially different — potentially lower — than the estimated value range disclosed in the pricing supplement, particularly in the early stages of the notes' term when transaction costs and market-making spreads may be most impactful relative to the notes' fair value.

Key Dates and Timeline for the Notes from Pricing Through Maturity

According to the preliminary pricing supplement, the notes are expected to price on July 21, 2026, and to be issued on July 24, 2026. The Valuation Date — on which the Ending Value of each underlying will be determined — is July 23, 2029, subject to postponement as described under the relevant section of the accompanying product supplement. The Maturity Date is July 26, 2029, giving the notes an approximate three-year term if they are not called prior to maturity. All key dates listed in the filing are noted as subject to change.

The first Call Observation Date is July 22, 2027, meaning investors will not face an automatic call event in the first year of the notes' term. Thereafter, annual Call Observation Dates will follow according to the schedule set out on page PS-4 of the pricing supplement. Investors should note that these dates are all marked with an asterisk in the filing, indicating they remain subject to modification. The filing references the product supplement for the rules governing postponement of observation dates in the event of market disruptions affecting one or more of the three underlying indexes.

Preliminary Status of the Pricing Supplement and Outstanding Disclosures

The pricing supplement filed on July 14, 2026 is explicitly described as preliminary and subject to completion. Key economic terms — including the specific Call Amounts and the full schedule of Call Observation Dates and Call Payment Dates — are referenced as appearing on page PS-4 of the supplement but were not fully reproduced in the filing text available for this report. The principal amount of the offering itself also remains incomplete in the preliminary document, with the total dollar size listed as "$--" pending finalization on or around the pricing date of July 21, 2026.

Investors and market participants reviewing this preliminary disclosure should be aware that the final terms of the notes will be confirmed in the completed pricing supplement expected to be filed on or shortly after the pricing date. Until the final supplement is filed, certain economic terms remain subject to change. The filing was made pursuant to Rule 424(b)(2) and relates to a Registration Statement under the Securities Act of 1933 that was already effective at the time of filing. The filing notes that the pricing supplement and accompanying documents are not an offer to sell the notes in any jurisdiction where such an offer would not be permitted.