BofA Finance Launches $315 Million Auto-Callable Notes Linked to Intuit Stock With Memory Feature Coupons

Structured Product Design and Contingent Payment Mechanics

The notes issued by BofA Finance represent a complex structured product with features designed to generate income conditioned on the performance of Intuit Inc.'s common stock. The pricing supplement discloses that the notes carry a public offering price of $1,000 per note, with an underwriting discount of $27.50 per note, resulting in net proceeds to BofA Finance of $972.50 per $1,000 principal. The initial estimated value assigned to the notes as of the pricing date was $960.00 per $1,000, indicating the embedded costs of the derivative features exceed the discount alone.

The contingent coupon mechanism operates on a memory feature structure, meaning coupon payments accumulate based on how many monthly observation dates have elapsed with Intuit's stock trading at or above the coupon barrier of $212.74 (70 percent of the starting value of $303.91). The filing states that if the observation value meets this threshold, the contingent coupon payment equals the product of $17.509 multiplied by the cumulative count of contingent payment dates that have occurred, minus any previously paid coupons. This memory feature allows investors to receive accrued coupon entitlements even if earlier observation dates did not qualify for payment, provided subsequent dates do qualify.

Automatic Call Provisions and Early Redemption Terms

Beginning January 27, 2027, the notes automatically convert to an early redemption scenario if Intuit's stock closes at or above the call value of $303.91 (equaling 100 percent of the starting value) on any monthly call observation date. The disclosure explains that all notes will be called, not a subset, ensuring that if the stock reaches its initial pricing level, the entire issuance is retired. Upon an automatic call, investors receive $1,000 principal per note plus the applicable contingent coupon payment on the call payment date, after which no further amounts are payable.

The three-year approximate term reflects the mathematical expectation that the notes will likely be called before maturity if Intuit's stock appreciates. The filing indicates that call observation dates occur monthly beginning in January 2027, providing multiple opportunities for early redemption throughout the note's life. This feature benefits investors in scenarios where Intuit stock remains stable or rises, but exposes them to reinvestment risk if the notes are called and market conditions have shifted unfavorably by that time.

Downside Risk and Maturity Redemption Scenarios

The redemption amount at maturity depends entirely on whether Intuit's stock price has held above the 70 percent threshold ($212.74) as of the valuation date of July 27, 2029. If the ending value meets or exceeds this threshold, investors receive full principal of $1,000 per note plus any final contingent coupon payment. However, if the stock declines below $212.74 by maturity, the structure shifts dramatically, subjecting investors to one-to-one downside exposure to further stock declines.

The filing explicitly states that if the ending value falls below the threshold value, the redemption amount excluding any final coupon will be less than 70 percent of principal, with investors potentially losing up to 100 percent of their investment. This risk applies if Intuit's stock drops more than 30 percent from its starting value of $303.91 (a decline below $212.74). Notably, the structure offers a buffer: if the stock falls 30 percent or less (remaining above $212.74), investors still receive full principal recovery. This design reflects a knock-in put feature where capital protection ceases only upon breaching the deeper barrier during the three-year holding period.

Underlying Stock Reference and Observation Framework

The notes are exclusively linked to Intuit Inc.'s common stock, trading on the Nasdaq Global Select Market under the ticker symbol INTU. The filing designates July 27, 2026, as the pricing date, with the starting value fixed at $303.91 per share on that date. The observation value for any given observation date equals the closing market price of Intuit stock on that date, subject to a price multiplier of 1 (unadjusted unless corporate events trigger anti-dilution adjustments as detailed in the product supplement). Monthly observation dates commence and continue through the valuation date of July 27, 2029, unless postponed due to market holidays or other events specified in the product supplement.

The use of Intuit stock creates direct performance linkage to a major software and financial services provider in the cloud-based accounting and small business solutions space. Investors purchasing these notes are effectively taking a leveraged equity exposure to Intuit, with the structured format limiting upside participation through the call feature while simultaneously capping downside losses above the 30 percent decline threshold. The filing does not disclose Intuit's business segments, recent financial performance, or forward guidance; such information would be found in Intuit's own regulatory filings and investor presentations.

Guarantee Structure and Credit Risk Considerations

All payments on the notes, including principal and coupon amounts, are subject to the full credit risk of BofA Finance LLC as the direct issuer and Bank of America Corporation as the guarantor. The filing prominently discloses that the notes are not Federal Deposit Insurance Corporation (FDIC) insured and are not bank guaranteed in the traditional deposit sense, meaning they represent unsecured debt obligations of BofA Finance backed by the corporate guarantee of Bank of America. This guarantee does not eliminate credit risk; rather, it substitutes the credit quality of Bank of America for that of the special-purpose finance subsidiary.

The filing specifies that Bank of America Corporation provides an unconditional guarantee of all obligations under the notes. Investors rely on Bank of America's creditworthiness for timely payment of all amounts due. In the event of an event of default by BofA Finance, the senior indenture governs acceleration rights and the calculation of amounts due, with the redemption amount determined as if the acceleration date were the maturity date and the valuation date were the third trading day prior to acceleration. The filing notes that final contingent coupon payments in a default scenario would be prorated to reflect the actual length of the final contingent payment period.

Pricing, Distribution, and Market Characteristics

The $315 million total principal amount was distributed across minimum denominations of $1,000 per note in whole multiples thereof. The public offering price of $1,000 per note included an underwriting discount of $27.50, with net proceeds to BofA Finance of $972.50 per note before expenses. The filing notes that certain dealers purchasing notes for sale to fee-based advisory accounts may forgo selling concessions, resulting in a public offering price as low as $972.50 per note for those account types, reflecting revenue-sharing arrangements common in advisory relationships.

BofA Securities, Inc., an affiliate of BofA Finance, serves as both the calculation agent and the selling agent for the notes. The notes do not trade on any securities exchange but may be subject to secondary market transactions through dealers. The CUSIP identifier 09712G2X1 enables settlement and tracking in the book-entry system. The filing cautions that the actual value of notes at any time reflects many unpredictable factors and cannot be accurately forecast, directing investors to risk factor disclosures beginning on page PS-12 of the pricing supplement and page PS-4 of the product supplement for detailed information about structured product risks.

Anti-Dilution Adjustments and Corporate Event Protections

The price multiplier is set at 1 initially but remains subject to adjustment for certain corporate events affecting Intuit Inc., including stock splits, mergers, spin-offs, and other capitalization changes. The filing references the section "Description of the Notes — Anti-Dilution Adjustments" on page PS-20 of the product supplement for comprehensive details regarding how and when such adjustments apply. These protective provisions ensure that note holders are not economically disadvantaged by corporate restructurings that would otherwise dilute or enhance the underlying stock's economic value.

The calculation agent, BofA Securities, retains discretionary authority to determine whether anti-dilution adjustments are warranted and to calculate the magnitude of any adjustment. Common anti-dilution events include stock splits (both forward and reverse), dividend distributions, rights offerings, and certain merger or acquisition scenarios. The filing does not specify the precise mechanics or timing of adjustment decisions, directing readers to the complete product supplement documentation for full terms.

Prospectus and Registration Framework

The pricing supplement references underlying registration statements filed with the Securities and Exchange Commission, including Registration Statement Nos. 333-290665 and 333-290665-01. The notes are issued pursuant to a prospectus dated December 8, 2025, a Series A Prospectus Supplement dated December 8, 2025, and a Product Supplement STOCK-1 dated December 8, 2025. The pricing supplement itself was filed as a 424(b)(2) prospectus supplement on July 27, 2026, in accordance with SEC rules governing staged registration of securities offerings.

The filing contains mandatory SEC disclaimers stating that the SEC and no state securities commission has approved or disapproved the notes or determined whether the disclosure documents are truthful or complete. The prospectus framework establishes that risk factors applicable to structured notes are disclosed across multiple documents: risk factors specific to these notes appear on page PS-12 of the pricing supplement, product-level risks appear on page PS-4 of the product supplement, prospectus supplement risks appear on page S-7, and general debt security risks appear on page 7 of the base prospectus. Investors are responsible for reviewing all relevant documentation before purchasing.

Timeline and Issuance Schedule

The notes were priced on July 27, 2026, and issued on July 30, 2026, resulting in a three-day settlement period standard for equity-linked securities. The maturity date is fixed at August 1, 2029, establishing an approximately three-year term unless the notes are called earlier. Monthly observation dates and contingent payment dates are specified in the pricing supplement beginning on page PS-4, with call observation dates and call payment dates detailed on page PS-6. The first call observation date is January 27, 2027, establishing the earliest point at which automatic call provisions could be triggered.

The valuation date of July 27, 2029, is subject to postponement if that date falls on a non-trading day or if other market disruption events occur as described in the product supplement section titled "Description of the Notes—Certain Terms of the Notes—Events Relating to Observation Dates." This flexibility protects note holders from situations where standard market closures would prevent accurate valuation. The filing indicates that contingent payment dates and call payment dates follow the corresponding observation and call observation dates, with cash settlement occurring on the specified payment dates.

Investment Considerations and Disclosure Scope

Investors purchasing these notes face several distinct risks outlined in the filing. Capital is subject to up to 100 percent loss if Intuit's stock declines more than 30 percent from the July 27, 2026, pricing level. Additionally, investors participate only in coupons if the stock remains above the 70 percent barrier each month; failure to meet this condition on any observation date results in no coupon payment for that month, though the memory feature allows recovery if the barrier is subsequently cleared. The automatic call feature, while beneficial in rising markets, eliminates further upside participation and forces reinvestment decisions outside the investor's control.

The filing emphasizes that these notes are not suitable for investors seeking traditional debt security characteristics. Unlike conventional bonds, the notes offer no periodic interest payments independent of stock performance and expose principal to equity downside risk. The embedded optionality—particularly the call feature benefiting the issuer and the conditional coupon mechanism benefiting the issuer when Intuit's stock underperforms—create asymmetric risk profiles favoring BofA Finance. The initial estimated value of $960.00 per $1,000 note, compared to the $1,000 public offering price, represents the economic cost of these embedded derivative features. Potential purchasers should carefully review all risk factor disclosures and consult independent financial analysis before committing capital.