BofA Finance Launches Contingent Income Issuer Callable Yield Notes Linked to Dow Jones, Nasdaq-100 Technology Sector, and Russell 2000 Indexes

Structure and Terms of the Contingent Income Yield Notes

According to the preliminary pricing supplement filed July 14, 2026, BofA Finance LLC intends to issue the Contingent Income Issuer Callable Yield Notes in minimum denominations of $1,000.00 and whole multiples thereof. The notes are being offered at a public offering price of $1,000.00 per note, with an underwriting discount of up to $25.00 per $1,000.00 in principal, resulting in proceeds before expenses to BofA Finance of at least $975.00 per note. An affiliate of BofA Finance may also pay a referral fee of up to $6.25 per $1,000.00 in principal amount to other registered broker-dealers in connection with distribution of the notes.

The notes are fully and unconditionally guaranteed by Bank of America Corporation. The pricing supplement makes clear that the notes are not listed on any securities exchange, meaning investors will not have access to a continuous secondary market. The CUSIP number assigned to this issuance is 09712CLQ4, and BofA Securities, Inc., an affiliate of BofA Finance, is serving as both the selling agent and the calculation agent for the notes.

How the Contingent Coupon Payment Mechanism Works

The notes carry a contingent coupon rate of 8.40% per annum, equivalent to 0.70% per month, amounting to $7.00 per $1,000.00 in principal on each applicable contingent payment date. However, this coupon is not guaranteed. The disclosure states that the coupon is payable in any given month only if the closing level of each of the three underlying indexes — the Dow Jones Industrial Average, the Nasdaq-100 Technology Sector Index, and the Russell 2000 Index — is greater than or equal to 70.00% of its respective starting value on the applicable monthly observation date.

If any single underlying index closes below its coupon barrier on a given observation date, no contingent coupon payment is made for that period. Because the payment depends on the least performing of the three underlyings meeting the threshold, investors are exposed to the weakest-performing index in any given month. This "worst-of" structure is a significant feature investors should evaluate carefully, as it introduces the risk that even a decline in just one of the three indexes could eliminate a monthly coupon payment entirely for that period.

Issuer Call Option Beginning October 2026

The disclosure confirms that BofA Finance has the right, beginning on October 28, 2026, to redeem all — but not less than all — of the notes on any monthly call payment date. If the notes are called, investors would receive the principal amount of $1,000.00 per note, plus the applicable contingent coupon payment if the conditions for payment are met on the corresponding observation date. No further amounts would be payable following an optional early redemption.

The filing states that BofA Finance must give notice to the trustee at least five business days but not more than 60 calendar days before the applicable call payment date. This call feature means investors face reinvestment risk: if market conditions are favorable and the notes are called early, investors may not be able to find comparable yields elsewhere. Conversely, if conditions deteriorate, BofA Finance would have less incentive to call the notes, meaning investors could remain exposed to losses through maturity.

Principal Protection Conditions and Downside Risk at Maturity

The preliminary pricing supplement sets out two distinct outcomes at maturity, depending on the performance of the least performing underlying. If the ending value of the least performing underlying — defined as the underlying with the lowest percentage return relative to its starting value — is greater than or equal to 60.00% of its starting value (the threshold value), investors receive the full $1,000.00 principal amount per note. A final contingent coupon payment is also made if the ending value is simultaneously at or above the 70.00% coupon barrier.

However, if the ending value of the least performing underlying falls below 60.00% of its starting value at maturity, investors are exposed to losses on a 1:1 basis, meaning every percentage point decline below the threshold is reflected directly in the redemption amount. The filing states explicitly that the redemption amount, excluding any final contingent coupon payment, will be less than 60.00% of the principal amount in this scenario, and investors could lose up to 100.00% of their investment. This downside scenario underscores the structured nature of this product and the importance of understanding the risk profile before investing.

Initial Estimated Value Below Public Offering Price

A notable disclosure in the preliminary pricing supplement is that 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. This means that on the date the notes are purchased at the $1,000.00 public offering price, the estimated fair value is below what investors pay. This difference reflects costs embedded in the offering, including the underwriting discount, hedging costs, and the structuring margin of the issuer.

The disclosure cautions that the actual value of the notes at any time will reflect many factors and cannot be predicted with accuracy. Investors should review the "Structuring the Notes" and "Risk Factors" sections of the pricing supplement — referenced in the document as appearing at specific pages — before making a decision. The filing emphasizes that these notes are fundamentally different from conventional debt securities, and that the embedded costs mean investors begin with a position that carries an immediate implied market discount.

The Three Underlying Indexes and Their Role in Payment Calculations

The notes are linked to three widely followed U.S. equity benchmarks, each classified as a price return index in the filing. The Dow Jones Industrial Average tracks 30 large-cap U.S. companies and is identified in the disclosure with Bloomberg symbol "INDU." The Nasdaq-100 Technology Sector Index, carrying Bloomberg symbol "NDXT," focuses on technology-sector components of the Nasdaq-100. The Russell 2000 Index, Bloomberg symbol "RTY," tracks approximately 2,000 smaller U.S. public companies and is widely used as a measure of small-cap equity performance.

Because the note's coupon payments, call provisions, and maturity redemption amount all depend on the least performing of these three indexes, the structural dynamic involves monitoring three distinct market segments simultaneously. A material divergence in performance — for example, small-cap equities declining significantly while large-cap indexes hold steady — could trigger the worst-of outcome without any single index necessarily suffering a dramatic collapse. This cross-index dependency makes the notes more complex than single-index structured products.

Credit Risk of BofA Finance LLC and Bank of America Corporation

The filing is explicit that all payments on the notes are subject to the credit risk of both BofA Finance LLC as the issuer and Bank of America Corporation as the guarantor. BofA Finance LLC is a financing subsidiary of Bank of America, and its obligations under the notes are fully and unconditionally guaranteed by the parent company. This guarantee provides investors with exposure to the creditworthiness of one of the largest U.S. financial institutions, but it does not eliminate credit risk entirely.

The preliminary pricing supplement also prominently discloses that the notes are not FDIC insured, are not bank guaranteed in the traditional deposit-protection sense, and may lose value. Investors are therefore accepting both market risk tied to the performance of the underlying indexes and credit risk associated with the issuer and guarantor. The filing directs potential purchasers to the "Risk Factors" sections across multiple accompanying documents — the product supplement, prospectus supplement, and base prospectus — for a comprehensive discussion of these risks.

Observation Schedule, Valuation Date, and Maturity Mechanics

The notes operate on a monthly observation schedule throughout their approximately 18-month term. Each observation date determines whether the contingent coupon is payable for that period, and whether the issuer elects to exercise its call option beginning in October 2026. The final valuation date is set for January 24, 2028, subject to postponement as described in the accompanying product supplement, with the maturity date being January 27, 2028.

The filing notes that in the event of an acceleration following an event of default under the senior indenture, the redemption amount would be calculated as though the date of acceleration were the maturity date and as though the valuation date were the third trading day prior to the date of acceleration. Any final contingent coupon payment determined under such circumstances would be prorated by the calculation agent to reflect the length of the final contingent payment period. These provisions reflect standard structured note mechanics under the senior indenture terms described in the accompanying prospectus.

Distribution, Selling Concessions, and Fee-Based Account Considerations

The preliminary pricing supplement outlines specific arrangements for the distribution of the notes through BofA Securities, Inc. as the selling agent. The underwriting discount may be as high as $25.00 per $1,000.00 in principal amount. Additionally, the filing discloses that certain dealers who purchase the notes for sale to fee-based advisory accounts may forgo some or all of their selling concessions, fees, or commissions. In those circumstances, the public offering price for investors in fee-based advisory accounts may be as low as $975.00 per $1,000.00 in principal amount.

Furthermore, the disclosure states that an affiliate of BofA Finance will pay a referral fee of up to $6.25 per $1,000.00 in principal amount to other registered broker-dealers involved in distributing the notes. These fee and compensation arrangements are standard for structured product offerings of this type but are material pieces of information for investors evaluating the total cost of the investment. The notes are not exchange-listed, meaning liquidity in a secondary market — if available at all — would be through the issuer's affiliates or other broker-dealers, at prices that could be below the initial estimated value.

Preliminary Status and Expected Final Pricing Timeline

The document as filed is described as a preliminary pricing supplement that is not complete and may be changed. Final terms, including the starting values for each underlying index, will be set on the pricing date of July 23, 2026. Until that date, key economic terms such as the exact coupon barrier levels and threshold values — which are expressed as percentages of each index's starting value on the pricing date rather than as fixed numerical levels — will not be definitively established.

The registration statement under which the notes are being offered was declared effective under the Securities Act of 1933. The filing references Registration Statement Nos. 333-290665 and 333-290665-01, and was filed pursuant to Rule 424(b)(2). The accompanying documents referenced in the supplement include a base prospectus dated December 8, 2025, a Series A Prospectus Supplement dated December 8, 2025, and Product Supplement EQUITY-1 dated December 8, 2025. Investors may wish to review all of these documents in conjunction with the preliminary pricing supplement before the final terms are set.