BofA Finance Prices $1.166 Million Market-Linked Securities With Auto-Call Feature Tied to Alphabet, Meta, and Deere Performance

Offering Structure and Pricing Details

BofA Finance LLC, a subsidiary of Bank of America Corporation, priced the market-linked securities offering on July 15, 2026, with an issue date of July 20, 2026. The disclosure indicates a public offering price of $1,000.00 per security, with a total offering size of 1,166 securities representing $1.166 million in principal amount. The company did not disclose the number of securities offered or the pricing breakdown beyond what appears in the offering table. Wells Fargo Securities, LLC and BofA Securities, Inc. are serving as selling agents for the distribution, acting in a principal capacity. The underwriting discount totaled $27,109.50, representing approximately 2.325% of the total offering proceeds, with additional potential marketing fees of up to $3.00 per security payable to selected securities dealers.

The initial estimated value of the securities as of the pricing date was $974.00 per security, representing a discount to the public offering price of $1,000.00 and suggesting the issuer valued embedded optionality and risk features below par. Bank of America Corporation provided a full and unconditional guarantee of all payments on the securities. The filing states that the securities will not be listed on any securities exchange, limiting secondary market liquidity. Investors purchasing the securities received proceeds to the issuer of $976.75 per security after underwriting discounts, totaling approximately $1.138 million after all costs.

Lowest-Performing Stock Mechanism and Market Exposure

A critical feature of the securities is their linkage to the lowest-performing of three underlying stocks: Alphabet Inc., Meta Platforms, Inc., and Deere & Company. The disclosure explains that the lowest-performing underlying stock on any calculation day is determined by which of the three stocks has the lowest closing price expressed as a percentage of its starting price. This structure means that investors have no upside participation in the better-performing stocks and will be adversely affected if any single underlying stock performs poorly, regardless of how favorably the other two stocks perform. The filing explicitly states: "Your return on the Securities will depend solely on the performance of the Lowest Performing Underlying Stock on each Calculation Day. You will not benefit in any way from the performance of the better performing Underlying Stocks."

This "worst-of" basket structure concentrates downside risk for the investor. The disclosure notes that investors will not participate in any appreciation of any underlying stock and will not receive any dividends on any underlying stock. The implication is that the contingent coupon payments and potential principal repayment depend entirely on whether the lowest performer meets certain price thresholds on specified calculation days. This design shifts performance measurement away from an average or best-performing stock toward the most vulnerable component of the portfolio, significantly raising the probability that coupon barriers and principal protection thresholds will not be met during market dislocations.

Contingent Coupon Structure With Memory Feature

The securities offer a contingent quarterly coupon at an annual rate of 21.00%, equating to approximately $52.50 per $1,000 security per quarter if payment conditions are met. However, the disclosure makes clear that coupon payments are contingent: they are paid on each quarterly contingent coupon payment date if and only if the stock closing price of the lowest-performing underlying stock on the related calculation day is greater than or equal to its coupon barrier. The coupon barrier for each underlying stock is equal to 70% of its starting price, meaning that if the lowest performer falls below 70% of where it started, no coupon is paid that quarter.

The securities incorporate a memory feature, which the filing describes as follows: if the closing price of the lowest-performing underlying stock on one or more calculation days is less than the coupon barrier and, on a subsequent calculation day, the closing price is greater than or equal to the coupon barrier, the securities will pay the contingent coupon due for that subsequent calculation day plus all previously unpaid contingent coupon payments without interest. This mechanism protects investors from permanently losing coupon payments if the lowest performer recovers, but only if recovery occurs before maturity. The filing explicitly states that if the closing price of the lowest-performing underlying stock remains below the coupon barrier on every calculation day throughout the entire term, investors will receive no contingent coupons at all.

Auto-Callable Provision and Quarterly Call Dates

The securities feature an automatic call provision that can terminate the investment prior to maturity if the lowest-performing underlying stock meets or exceeds its starting price. The disclosure outlines that if the stock closing price of the lowest-performing underlying stock on any quarterly calculation day from October 2026 to April 2029, inclusive, is greater than or equal to its starting price, the securities will be automatically called for the principal amount plus a final contingent coupon payment and any previously unpaid contingent coupon payments. This means there are multiple opportunities for automatic call spread across approximately 2.75 years, with calculation days occurring quarterly during that window.

The auto-call feature creates an asymmetric return profile. If the lowest-performing stock recovers to its starting price early in the three-year period, investors receive their principal back along with accrued coupons, effectively capping their upside gain. This structure benefits the issuer more than the investor, as the issuer profits from the full upside if the lowest performer appreciates significantly beyond its starting price, while investors are called away at par. The filing does not disclose the specific calendar dates of each quarterly calculation day, only that they occur from October 2026 through April 2029.

Principal at Risk and Threshold Price Exposure

If the securities are not automatically called prior to the maturity date of July 19, 2029, investors face conditional or full loss of principal depending on the closing price of the lowest-performing underlying stock on the final calculation day. The disclosure specifies that investors will receive the principal amount on the maturity date if and only if the stock closing price of the lowest-performing underlying stock on the final calculation day is greater than or equal to its threshold price. The threshold price for each underlying stock is equal to 70% of its starting price—the same level as the coupon barrier.

If the lowest-performing underlying stock closes below 70% of its starting price on the final calculation day, investors lose more than 30% of principal, and potentially all of it. The filing states explicitly: "If the stock closing price of the Lowest Performing Underlying Stock on the Final Calculation Day is less than its Threshold Price, you will lose more than 30%, and possibly all, of the principal amount of your Securities." Furthermore, if not automatically called, investors will have full downside exposure to the lowest-performing underlying stock from its starting price if its closing price on the final calculation day is below the threshold price. This means the investor absorbs losses dollar-for-dollar with the stock's decline below 70%, with no participation in recovery if the stock falls sharply during the final measurement period.

Credit Risk and Guarantor Strength

All payments on the securities are subject to the credit risk of BofA Finance LLC as the issuer and Bank of America Corporation as the guarantor. The disclosure notes this risk but does not provide a credit rating, financial metrics, or assessment of the guarantor's ability to meet its obligations. Bank of America Corporation's guarantee is described as full and unconditional, meaning that if BofA Finance fails, the guarantee obligates the parent company to make all payments. However, the value of any guarantee depends on the financial strength and creditworthiness of Bank of America Corporation at the time payment is due, which the filing does not assess or update.

The presence of a bank guarantee adds a layer of credit protection compared to unsecured debt, but investors are still exposed to Bank of America's credit quality over the three-year term. The filing does not disclose Bank of America's current credit rating, leverage ratio, or other solvency metrics as of the pricing date. Investors relying on this guarantee would need to conduct separate due diligence on Bank of America's financial condition independent of this document.

Complexity, Valuation Discrepancy, and Risk Disclosure

The disclosure emphasizes the complex nature of these securities and the difficulty in assessing their fair value. The initial estimated value of $974.00 per security compared to a public offering price of $1,000.00 represents a valuation gap of $26.00 or 2.6%, suggesting the issuer estimates the embedded options and contingent features are worth substantially less than the premium investors pay upfront. The filing states: "The initial estimated value of the Securities as of the Pricing Date is $974.00 per Security, which is less than the public offering price listed below. The actual value of your Securities at any time will reflect many factors and cannot be predicted with accuracy."

The disclosure identifies multiple risk categories requiring investor attention. The filing repeatedly directs readers to "Selected Risk Considerations" beginning on page PS-9 of the pricing supplement, "Structuring the Securities" on page PS-21, "Risk Factors" in the product supplement, and risk sections in the prospectus supplement and base prospectus. The issuer warns that "The Securities have complex features and investing in the Securities involves risks not associated with an investment in conventional debt securities." This language indicates the structural complexity and the departure from standard debt characteristics create risks that may not be immediately apparent. The securities offer no fixed interest payments, no guaranteed principal repayment, and contingent payouts dependent on multiple performance thresholds across three different stocks.

Registration and Securities Offering Framework

The pricing supplement was filed pursuant to Rule 424(b)(2) under the Securities Act, referencing Registration Statement Nos. 333-290665 and 333-290665-01. The offering relies on a prospectus dated December 8, 2025, a Series A prospectus supplement dated December 8, 2025, and a product supplement No. WF-1 dated December 8, 2025. This multi-document framework indicates the securities are offered under a registered shelf offering that allows the issuer to bring multiple tranches to market over time. The pricing supplement itself, dated July 15, 2026, represents the final terms for this specific tranche of securities.

The disclosure includes a standard disclaimer stating that none of the SEC, any state securities commission, or any other regulatory body has approved or disapproved the securities or determined if the pricing supplement and accompanying documents are truthful or complete. The issuer explicitly warns that any representation to the contrary is a criminal offense. Denominations of the securities are $1,000 and any integral multiple thereof, and references to "Security" in the pricing supplement refer to a $1,000 denomination security.

Market Disruption and Postponement Provisions

The maturity date of July 19, 2029, is stated to be subject to postponement as described in "Market Disruption Events and Postponement Provisions" in the pricing supplement. The disclosure does not detail the specific circumstances that would trigger postponement, but the reference suggests that if a market disruption event occurs on a scheduled calculation day or maturity date, the valuation of underlying stocks may be delayed, and the relevant determination dates may be postponed to a subsequent business day. This provision protects investors from having their securities valued at artificially extreme prices during market closures or disruptions, but it also introduces timing uncertainty around the final valuation date and maturity date.

The securities are not subject to repayment at the option of any holder prior to the maturity date, meaning investors cannot redeem or put the securities back to the issuer if they wish to exit their position early. Investors seeking to liquidate their holdings before maturity would need to find a willing buyer in the secondary market, where liquidity may be limited or unavailable given that the securities will not be listed on any exchange. This illiquidity risk, combined with the complexity of valuing the securities, could result in significant transaction costs or unfavorable pricing if an investor needs to exit before maturity.

Investor Considerations and Final Valuation Mechanics

The return profile of these securities is heavily weighted toward the issuer's benefit in scenarios of strong equity performance and toward the investor's detriment in scenarios of equity weakness. If all three underlying stocks appreciate significantly, the lowest performer will likely still reach the starting price by one of the quarterly calculation dates, triggering auto-call at par—the investor receives principal plus accrued coupons but no upside participation. If the lowest performer declines modestly to between 70% and 100% of starting price, the investor receives no contingent coupons until recovery occurs, losing income and experiencing negative carry relative to the 21% annual coupon rate. If the lowest performer declines below 70%, investors lose principal, and if it declines further, losses accelerate with no floor protection except at 70% of the starting price.

The contingent coupon rate of 21.00% per annum may appear attractive in absolute terms but must be evaluated against the risk of non-payment if the coupon barrier is breached and the risk of principal loss if the threshold price is breached at maturity. The memory feature provides some recovery opportunity for missed coupons if the lowest performer rebounds, but only until maturity; coupons missed on the final calculation day are lost permanently. The use of the "lowest performing" stock among three major technology and industrial companies amplifies downside risk, as equity market dislocations often affect multiple sectors simultaneously, increasing the probability that the lowest performer will breach the 70% thresholds during economic or market stress periods.