BofA Finance Introduces AMD-Linked Contingent Income Auto-Callable Yield Notes with Memory Feature and Quarterly Coupons

Details of Structured Note Terms and AMD Stock Linkage

BofA Finance's structured notes are designed to track the performance of AMD common stock over an approximate three-year term, maturing on July 27, 2029. The starting value for return calculations will be the closing price of AMD stock on the pricing date, July 24, 2026.

Featuring a memory feature, the notes accumulate contingent coupon payments over time. Quarterly contingent coupons are payable if AMD stock's observation value on any observation date is at least 50% of its starting value. Each coupon equals a minimum of $56.875 per $1,000 principal multiplied by the number of contingent payment dates elapsed, minus prior payments. The coupon rate will be finalized on the pricing date. The notes’ initial estimated value is expected between $920 and $970 per $1,000 principal, below the $1,000 offering price.

Automatic Call and Early Redemption Provisions

The notes include an automatic call feature starting with the October 26, 2026 observation date, occurring quarterly thereafter. If AMD stock’s observation value on any call date is at least 100% of its starting value, the notes will be redeemed early at par plus the applicable contingent coupon. This limits upside participation, as investors receive principal plus accumulated coupons rather than additional gains.

Upon automatic call, early redemption payments are made on the call payment date, ending further payments. This feature caps returns during periods of strong AMD stock performance, compensating investors only for the holding period without capturing gains beyond the call trigger.

Downside Risk and Principal Exposure at Maturity

If the notes are not called early and AMD stock declines more than 50% from its starting value by maturity, investors face full downside exposure, risking up to 100% of principal. Redemption amounts could fall significantly below the initial investment if AMD’s ending value is below the 50% threshold.

Conversely, if AMD stock remains at or above 50% of its starting value at maturity, investors receive full principal. A final contingent coupon is also payable if the final observation value meets or exceeds the 50% barrier. This asymmetric payoff structure means investors bear downside losses beyond the 50% decline but have limited upside due to the automatic call.

Pricing, Underwriting Discount, and Valuation Insights

The notes’ public offering price is $1,000 per $1,000 principal, with a $20 underwriting discount, resulting in net proceeds of $980 to BofA Finance before expenses. Dealers selling to fee-based advisory accounts may waive some or all selling concessions, potentially lowering the offering price to $980 per $1,000 principal. This discount structure allows pricing flexibility across distribution channels.

The initial estimated value at pricing is between $920 and $970 per $1,000 principal, indicating a significant discount to the offering price. The filing notes that the notes’ actual value will fluctuate based on multiple factors and cannot be precisely predicted, implying investors face an immediate valuation discount upon purchase.

Bank of America Guarantee and Credit Risk Considerations

Bank of America Corporation provides a full, unconditional guarantee of the notes. However, payments are subject to the credit risk of both BofA Finance LLC and Bank of America Corporation. The notes are not FDIC insured nor bank guaranteed in the traditional sense despite the guarantee, highlighting the importance of assessing Bank of America’s creditworthiness.

This guarantee offers credit enhancement compared to unsecured corporate debt, but investors should consider the potential impact of financial stress on payment ability, especially if AMD stock suffers significant declines resulting in principal loss.

Observation Dates and Coupon Payment Schedule

The notes feature quarterly observation dates starting October 26, 2026, to determine contingent coupon eligibility and automatic call conditions. The memory feature allows missed coupons—due to AMD stock dropping below 50%—to accumulate and potentially be paid later if the stock recovers above the barrier.

This path-dependent structure means the timing and sequence of AMD stock price movements significantly affect returns. Early declines followed by recovery may yield full coupon payments, whereas early strong performance followed by deterioration may result in missed coupons and reduced returns.

Anti-Dilution and Corporate Event Adjustments

The filing outlines anti-dilution provisions that adjust the price multiplier, initially set at 1, in response to corporate events impacting AMD stock. BofA Securities, Inc. will act as calculation agent responsible for these adjustments, which protect investors from dilution caused by stock splits, dividends, or other corporate actions.

These standard equity-linked product provisions ensure that over the three-year term, corporate actions do not disadvantage investors while maintaining the economic intent of the notes.

Registration, Distribution, and Secondary Market Information

Registered under Rule 424(b)(2) of the Securities Act of 1933, the notes relate to registration statements 333-290665 and 333-290665-01. BofA Securities, Inc. serves as both calculation and selling agent. The notes carry CUSIP 09712GDY7 and will not be listed on any exchange, requiring investors to trade through dealers in the secondary market.

The preliminary pricing supplement dated July 23, 2026, references a product supplement, prospectus supplement, and prospectus all dated December 8, 2025. This multi-document disclosure framework is typical for complex structured products. The pricing supplement is preliminary and subject to finalization before the July 24, 2026 pricing date.

Risk Factors and Valuation Uncertainties

The filing highlights substantial differences from traditional debt securities and directs investors to extensive risk disclosures across multiple documents. The notes carry significant complexities and risks, including the expected initial valuation discount relative to the offering price.

The issuer cautions that the notes’ value will vary with market conditions, volatility, and interest rates, and cannot be accurately forecasted. Investors should not expect the notes to appreciate to par and must be prepared for prolonged depressed valuations in the secondary market.

SEC Review and Regulatory Notices

The filing clarifies that neither the SEC nor any state securities commission has approved or disapproved the securities or confirmed the accuracy of the pricing supplement and related documents. Any contrary representations are criminal offenses.

As a preliminary filing, terms and pricing remain subject to change before the July 24, 2026 pricing date. Prospective investors should monitor final documentation closely. The layered prospectus structure requires thorough review to fully understand all features and risks associated with these equity-linked structured notes.