BAC Auto-Callable Notes: 9-27% Premiums & 10% Buffer, July 2025 Issue
Bank of America Corporation (BAC), through its subsidiary BofA Finance LLC, is marketing Market Linked Securities—Auto-Callable with Fixed Percentage Buffered Downside Principal at Risk Securities tied to the Russell 2000® Index.
Rhea-AI Filing Summary
Bank of America Corporation (BAC), through its subsidiary BofA Finance LLC, is marketing Market Linked Securities—Auto-Callable with Fixed Percentage Buffered Downside Principal at Risk Securities tied to the Russell 2000® Index. Key dates include a Pricing Date of 17 July 2025, Issue Date of 22 July 2025, and Maturity Date of 20 July 2028. The notes are issued in $1,000 denominations and may be automatically called if the index closes at or above the Starting Value on any annual Call Date, providing minimum Call Premiums of 9 %, 18 % and 27 % (exact rates set on pricing). If not called, investors receive:
- $1,000 if the Ending Value is between 90 % and 100 % of the Starting Value (10 % downside buffer).
- $1,000 minus 1:1 downside exposure if the Ending Value falls below 90 % of the Starting Value, exposing investors to up to a 90 % loss of principal.
Positive
- Escalating Call Premiums of at least 9 %, 18 % and 27 % offer predictable, potentially attractive returns if the index performs modestly.
- 10 % downside buffer provides limited protection against moderate market declines before principal loss begins.
- Full BAC guarantee reduces standalone issuer credit risk relative to a non-guaranteed structure.
Negative
- Upside capped at fixed Call Premiums; investors forfeit any additional index appreciation beyond 27 %.
- No interest payments; negative carry versus conventional debt if the notes are not called early.
- Principal is at risk 1:1 below a 10 % index drop, exposing holders to up to 90 % loss.
- Initial estimated value up to 9.6 % below offer price implies immediate mark-to-market drag and high embedded fees.
- Liquidity and valuation risk; trading market may never develop, making early exit costly.
- Complex tax treatment remains uncertain for U.S. federal purposes.
Insights
TL;DR: Callable note offers 9-27% capped upside, 10% buffer, but full credit and market risk—neutral for BAC, niche for yield seekers.
The term sheet outlines a typical auto-callable, buffered principal-at-risk structure. Investors receive annual call opportunities with escalating minimum premiums (9 %, 18 %, 27 %); however, upside ceases once called, and there is no participation beyond these fixed returns. The 10 % buffer shields against modest index declines but leaves investors exposed to sharp downturns on a 1:1 basis below the threshold. With an initial estimated value up to 9.6 % below par, buyers pay an implied fee for embedded derivatives and dealer margin. From a corporate-finance viewpoint, issuance diversifies BAC’s funding mix at an attractive all-in cost versus vanilla debt, but is immaterial to earnings. For sophisticated investors seeking enhanced yield versus Treasuries, the profile may appeal, yet limited liquidity and tax uncertainty warrant caution.
TL;DR: Product carries significant downside, capped upside, credit exposure—risk profile skews negative for unsophisticated buyers.
The note embeds several stacked risks: equity market risk (small-cap Russell 2000), issuer/guarantor credit risk, liquidity risk, and complex tax treatment. A 10 % buffer is modest given small-cap volatility; a 25 % index drop would haircut principal to 65 % of par. Absence of interim coupons means negative carry if not called. Auto-call uncertainty may result in reinvestment risk during falling rate regimes. The secondary price could trade well below the already discounted initial value due to wide bid-ask spreads. Overall, suitability is limited to investors who can model path-dependent returns and tolerate potential 90 % loss.
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What is the ticker symbol for Bank of America issuing these notes?
The guarantor is Bank of America Corporation (BAC); the notes themselves are not exchange-listed.
How much can investors earn on the BAC auto-callable notes?
If called, investors receive at least 9 %, 18 % or 27 % of principal, depending on the Call Date reached.
What downside protection do the BAC Market Linked Securities provide?
There is a 10 % buffer; losses begin if the Russell 2000 falls more than 10 % from the Starting Value.
Do the BAC Russell 2000-linked notes pay coupons?
No. The securities do not bear interest; returns are delivered only via Call Premiums or at maturity.
What is the credit risk associated with these securities?
Payments depend on BofA Finance LLC and BAC’s ability to pay; a BAC guarantee mitigates but does not eliminate credit risk.
Why is the initial estimated value below the $1,000 offer price?
The $904.25–$964.25 estimate reflects dealer compensation and hedging costs, not the securities’ secondary market price.
AI-generated analysis. How Rhea-AI works. Not financial advice.
Filed Pursuant to Rule 433
Registration Nos. 333-268718 and 333-268718-01
BofA Finance LLC
Fully and Unconditionally Guaranteed by Bank of America Corporation
Market Linked Securities |
  |
Market Linked Securities—Auto-Callable with Fixed Percentage Buffered Downside
Principal at Risk Securities Linked to the Russell 2000® Index due July 20, 2028
Term Sheet to Preliminary Pricing Supplement dated July 10, 2025 |
Summary of Terms
Issuer and Guarantor: |
BofA Finance LLC (“BofA Finance” or “Issuer”) and Bank of America Corporation (“BAC” or the “Guarantor”) |
Underlying: |
The Russell 2000® Index |
Pricing Date*: |
July 17, 2025 |
Issue Date*: |
July 22, 2025 |
Maturity Date*: |
July 20, 2028 |
Denominations: |
$1,000 and any integral multiple of $1,000. |
Automatic Call: |
If the closing level of the Underlying on any Call Date is greater than or equal to the Starting Value, the Securities will be automatically called for the principal amount plus the Call Premium applicable to that Call Date. |
Call Dates* and Call Premiums: |
Call Date
Call Premium†
July 22, 2026
At least 9.00% of the principal amount
July 22, 2027
At least 18.00% of the principal amount
July 17, 2028 (the “Final Calculation Day”)
At least 27.00% of the principal amount
† to be determined on the Pricing Date.
|
Call Settlement Date: |
Three business days after the applicable Call Date. |
Maturity Payment Amount (per Security): |
If the Securities are not automatically called, you will receive a Maturity Payment Amount that could be equal to or less than the principal amount per Security:
●
If the Ending Value is less than the Starting Value but greater than or equal to the Threshold Value: $1,000; or
●
If the Ending Value is less than the Threshold Value: $1,000 minus
 |
Starting Value: |
The closing level of the Underlying on the Pricing Date |
Ending Value: |
The closing level of the Underlying on the Final Calculation Day |
Threshold Value: |
90% of the Starting Value. |
Calculation Agent: |
BofA Securities, Inc. (“BofAS”), an affiliate of BofA Finance |
Underwriting Discount**: |
Up to 2.575% per Security; dealers, including those using the trade name Wells Fargo Advisors (WFA), may receive a selling concession of 2.00% per Security and WFA may receive a distribution expense fee of 0.075% per Security. |
CUSIP: |
09711J7H6 |
Material Tax Consequences: |
See the preliminary pricing supplement. |
*Subject to change.
** In addition, selected dealers may receive a fee of up to 0.30% per Security for marketing and other services. |
|
Hypothetical Payout Profile***
*** prepared for purposes of illustration only; assumes a Call Premium equal to the lowest possible Call Premium that may be determined on the Pricing Date.
If the Securities are not automatically called and the Ending Value is less than the Threshold Value, you will receive less, and possibly 90.00% less, than the principal amount of your Securities on the Maturity Date.
Any positive return on the Securities will be limited to any applicable Call Premium, even if the closing level of the Underlying on the applicable Call Date significantly exceeds the Starting Value. You will not participate in any appreciation of the Underlying beyond any applicable Call Premium.
The initial estimated value of the Securities as of the pricing date is expected to be between $904.25 and $964.25 per Security, which is less than the public offering price. The actual value of your Securities at any time will reflect many factors and cannot be predicted with accuracy. See “Selected Risk Considerations” beginning on page PS-8 of the accompanying preliminary pricing supplement and “Structuring the Securities” on page PS-18 of the accompanying preliminary pricing supplement for additional information.
Preliminary Pricing Supplement: https://www.sec.gov/Archives/edgar/data/70858/000191870425010976/form424b2.htm
The Securities have complex features and investing in the Securities involves risks not associated with an investment in conventional debt securities. Potential purchasers of the Securities should consider the information in “Selected Risk Considerations” beginning on page PS-8 of the accompanying preliminary pricing supplement and in “Risk Factors” beginning on page PS-5 of the accompanying product supplement, page S-6 of the accompanying prospectus supplement, and page 7 of the accompanying prospectus.
This introductory term sheet does not provide all of the information that an investor should consider prior to making an investment decision.
Investors should carefully review the accompanying preliminary pricing supplement, product supplement, prospectus supplement and prospectus before making a decision to invest in the Securities.
NOT A BANK DEPOSIT AND NOT INSURED OR GUARANTEED BY THE FDIC OR ANY OTHER GOVERNMENTAL AGENCY
Selected Risk Considerations
The risks set forth below, as well as additional risks related to this investment, are discussed in detail in the “Selected Risk Considerations” section in the accompanying preliminary pricing supplement. Please review those risk disclosures carefully.
●
Your investment may result in a loss; there is no guaranteed return of principal.
●
Any positive investment return on the Securities is limited.
●
The Securities do not bear interest.
●
The Call Premium or Maturity Payment Amount, as applicable, will not reflect the levels of the Underlying other than on the Call Dates.
●
The Securities are subject to a potential automatic call, which would limit your ability to receive further payment on the Securities.
●
Your return on the Securities may be less than the yield on a conventional debt security of comparable maturity.
●
A Call Settlement Date and the Maturity Date may be postponed if a Call Date is postponed.
●
Any payment on the Securities is subject to the credit risk of BofA Finance, as issuer, and BAC, as Guarantor, and actual or perceived changes in BofA Finance’s or the Guarantor’s creditworthiness are expected to affect the value of the Securities.
●
We are a finance subsidiary and, as such, have no independent assets, operations or revenues.
●
The public offering price you pay for the Securities will exceed their initial estimated value.
●
The initial estimated value does not represent a minimum or maximum price at which BofA Finance, BAC, BofAS or any of our other affiliates or Wells Fargo Securities, LLC (“WFS”) or its affiliates would be willing to purchase your Securities in any secondary market (if any exists) at any time.
|
●
BofA Finance cannot assure you that a trading market for your Securities will ever develop or be maintained.
●
The Securities are not designed to be short-term trading instruments, and if you attempt to sell the Securities prior to maturity, their market value, if any, will be affected by various factors that interrelate in complex ways, and their market value may be less than the principal amount.
●
Trading and hedging activities by BofA Finance, the Guarantor and any of our other affiliates, including BofAS, and WFS and its affiliates, may create conflicts of interest with you and may affect your return on the Securities and their market value.
●
There may be potential conflicts of interest involving the calculation agent, which is an affiliate of ours.
●
Changes that affect the Underlying may adversely affect the value of the Securities and any payments on the Securities.
●
We and our affiliates have no affiliation with the index sponsor and have not independently verified their public disclosure of information.
●
The Securities are subject to risks associated with small-size capitalization companies.
●
The U.S. federal income and estate tax consequences of the Securities are uncertain, and may be adverse to a holder of the Securities.
|
This term sheet is a summary of the terms of the Securities and factors that you should consider before deciding to invest in the Securities. BofA Finance and BAC have filed a registration statement (including preliminary pricing supplement, product supplement, prospectus supplement and prospectus) with the Securities and Exchange Commission, or SEC, for the offering to which this term sheet relates. Before you invest, you should read this term sheet together with the Preliminary Pricing Supplement dated July 10, 2025, Product Supplement No. WF-1 dated March 8, 2023 and Prospectus Supplement and Prospectus each dated December 30, 2022 to understand fully the terms of the Securities and other considerations that are important in making a decision about investing in the Securities. If the terms described in the accompanying preliminary pricing supplement are inconsistent with those described herein, the terms described in the accompanying preliminary pricing supplement will control. You may get these documents without cost by visiting EDGAR on the SEC Web site at sec.gov. Alternatively, any agent or any dealer participating in this offering will arrange to send you the accompanying preliminary pricing supplement, product supplement No. WF-1 and prospectus supplement and prospectus if you so request by calling toll-free at 1-800-294-1322.
Wells Fargo Advisors is a trade name used by Wells Fargo Clearing Services, LLC and Wells Fargo Advisors Financial Network, LLC, members SIPC, separate registered broker-dealers and non-bank affiliates of Wells Fargo Finance LLC and Wells Fargo & Company.
2