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MarketScreener Homepage  >  Equities  >  Nyse  >  Bank of America Corporation    BAC

BANK OF AMERICA CORPORATION

(BAC)
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Bank of America : Form of prospectus filed in connection with primary offering of securities on a delayed basis

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10/21/2019 | 02:11pm EST

Subject to Completion

Preliminary Term Sheet dated October 21, 2019

Filed Pursuant to Rule 424(b)(2) Registration Statement No. 333-213265 (To Prospectus dated November 4, 2016,

Prospectus Supplement dated November 4, 2016 and Product Supplement EQUITY INDICES ARN-1 dated December 22, 2016)

Units

Pricing Date*

October

, 2019

$10 principal amount per unit

Settlement Date*

October

, 2019

CUSIP No.

Maturity Date*

December , 2020

*Subject to change based on the actual date the notes are priced for initial sale to the public (the "pricing date")

BofA Finance LLC

Accelerated Return Notes® Linked to the EURO STOXX 50® Index

Fully and Unconditionally Guaranteed by Bank of America Corporation

  • Maturity of approximately 14 months
  • 3-to-1upside exposure to increases in the Index, subject to a capped return of [18% to 22%]
  • 1-to-1downside exposure to decreases in the Index, with 100% of your investment at risk
  • All payments occur at maturity and are subject to the credit risk of BofA Finance LLC, as issuer of the notes, and the credit risk of Bank of America Corporation, as guarantor of the notes
  • No periodic interest payments
  • In addition to the underwriting discount set forth below, the notes include a hedging-related charge of $0.075 per unit. See "Structuring the Notes"
  • Limited secondary market liquidity, with no exchange listing

The notes are being issued by BofA Finance LLC ("BofAFinance") and are fully and unconditionally guaranteed by Bank of America

Corporation ("BAC"). There are important differences between the notes and a conventional debt security, including different investment risks and certain additional costs. See "Risk Factors" beginning on page TS-7 of this term sheet, page PS-6 of product supplement EQUITY INDICES ARN-1, page S-4 of the accompanying Series A MTN prospectus supplement and page 7 of the accompanying prospectus.

The initial estimated value of the notes as of the pricing date is expected to be between $9.33 and $9.84 per unit, which is less than the public offering price listed below. See "Summary" on the following page, "Risk Factors" beginning on page TS-7of this term sheet and "Structuring the Notes" on page TS-12of this term sheet for additional information. The actual value of your notes at any time will reflect many factors and cannot be predicted with accuracy.

_________________________

None of the Securities and Exchange Commission (the "SEC"), any state securities commission, or any other regulatory body has approved or disapproved of these securities or determined if this Note Prospectus (as defined below) is truthful or complete. Any representation to the contrary is a criminal offense.

_________________________

Per Unit

Total

(1)

$10.00

$

Public offering price

(1)

$0.20

$

Underwriting discount

Proceeds, before expenses, to BofA Finance

$9.80

$

  1. For any purchase of 500,000 units or more in a single transaction by an individual investor or in combined transactions with the investor's household in this offering, the public offering price and the underwriting discount will be $9.95 per unit and $0.15 per unit, respectively. See "Supplement to the Plan of Distribution; Conflicts of Interest" below.

The notes and the related guarantee:

Are Not FDIC Insured

Are Not Bank Guaranteed

May Lose Value

BofA Merrill Lynch

October , 2019

Accelerated Return Notes®

Linked to the EURO STOXX 50® Index, due December , 2020

Summary

The Accelerated Return Notes® Linked to the EURO STOXX 50® Index, due December , 2020 (the "notes") are our senior unsecured debt securities. Payments on the notes are fully and unconditionally guaranteed by BAC. The notes and the related guarantee are not insured by the Federal Deposit Insurance Corporation or secured by collateral. The notes will rank equally with all of BofAFinance's other unsecured and unsubordinated debt, and the related guarantee will rank equally with all of BAC's other unsecured and unsubordinated obligations. Any payments due on the notes, including any repayment of principal, will be subject to the credit risk of BofA Finance, as issuer, and BAC, as guarantor.The notes provide you a leveraged return,

subject to a cap, if the Ending Value of the Market Measure, which is the EURO STOXX 50® Index (the "Index"), is greater than its Starting Value. If the Ending Value is less than the Starting Value, you will lose all or a portion of the principal amount of your notes. Any payments on the notes will be calculated based on the $10 principal amount per unit and will depend on the performance of the Index, subject to our and BAC's credit risk. See "Terms of the Notes" below.

The economic terms of the notes (including the Capped Value) are based on BAC's internal funding rate, which is the rate it would pay to borrow funds through the issuance of market-linked notes and the economic terms of certain related hedging arrangements. BAC's internal funding rate is typically lower than the rate it would pay when it issues conventional fixed or floating rate debt securities. This difference in funding rate, as well as the underwriting discount and the hedging related charge described below, will reduce the economic terms of the notes to you and the initial estimated value of the notes on the pricing date. Due to these factors, the public offering price you pay to purchase the notes will be greater than the initial estimated value of the notes.

On the cover page of this term sheet, we have provided the initial estimated value rangefor the notes. This initial estimated value range was determined based on our, BAC's and our other affiliates' pricing models, which take into consideration BAC's internal funding rate and the market prices for the hedging arrangements related to the notes. The initial estimated value of the notes calculated on the pricing date will be set forth in the final term sheet made available to investors in the notes. For more information about the initial estimated value and the structuring of the notes, see "Structuring the Notes" on page TS-12.

Terms of the Notes

Redemption Amount Determination

Issuer:

BofA Finance LLC ("BofA Finance")

On the maturity date, you will receive a cash payment per unit determined as follows:

Guarantor:

Bank of America Corporation ("BAC")

Principal Amount:

$10.00 per unit

Term:

Approximately 14 months

Market Measure:

The EURO STOXX 50® Index (Bloomberg symbol:

"SX5E"), a price return index

Starting Value:

The closing level of the Market Measure on the pricing

date

Ending Value:

The average of the closing levels of the Market

Measure on each calculation day occurring during the

maturity valuation period. The scheduled calculation

days are subject to postponement in the event of Market

Disruption Events, as described on page PS-19 of

product supplement EQUITY INDICES ARN-1.

Participation Rate:

300%

Capped Value:

[$11.80 to $12.20] per unit, which represents a return

of

[18% to 22%] over the principal amount. The actual

Capped Value will be determined on the pricing date.

Maturity Valuation

Five scheduled calculation days shortly before the

Period:

maturity date.

Fees and Charges:

The underwriting discount of $0.20 per unit listed on the

cover page and the hedging related charge of $0.075

per unit described in "Structuring the Notes" on page

TS-12.

Calculation Agent:

BofA Securities, Inc. ("BofAS"), an affiliate of BofA

Finance.

®

TS-2

Accelerated Return Notes

Accelerated Return Notes®

Linked to the EURO STOXX 50® Index, due December , 2020

The terms and risks of the notes are contained in this term sheet and in the following:

As a result of the completion of the reorganization of Bank of America's U.S. broker-dealer business, references to Merrill Lynch, Pierce, Fenner & Smith Incorporated ("MLPF&S") in the accompanying product supplement EQUITY INDICES ARN-1, prospectus supplement and prospectus, as such references relate to MLPF&S's institutional services, should be read as references to BofAS.

These documents (together, the "Note Prospectus") have been filed as part of a registration statement with the SEC, which may, without cost, be accessed on the SEC website as indicated above or obtained from MLPF&S or BofAS by calling 1-800-294-1322. Before you invest, you should read the Note Prospectus, including this term sheet, for information about us, BAC and this offering. Any prior or contemporaneous oral statements and any other written materials you may have received are superseded by the Note Prospectus. Capitalized terms used but not defined in this term sheet have the meanings set forth in product supplement EQUITY INDICES ARN-1. Unless otherwise indicated or unless the context requires otherwise, all references in this document to "we," "us," "our," or similar references are to BofA Finance, and not to BAC.

Investor Considerations

You may wish to consider an investment in the notes if:

The notes may not be an appropriate investment for you if:

  • You anticipate that the Index will increase moderately from the Starting Value to the Ending Value.
  • You are willing to risk a loss of principal and return if the Index decreases from the Starting Value to the Ending Value.
  • You accept that the return on the notes will be capped.
  • You are willing to forgo the interest payments that are paid on conventional interest bearing debt securities.
  • You are willing to forgo dividends or other benefits of owning the stocks included in the Index.
  • You are willing to accept a limited or no market for sales prior to maturity, and understand that the market prices for the notes, if any, will be affected by various factors, including our and BAC's actual and perceived creditworthiness, BAC's internal funding rate and fees and charges on the notes.
  • You are willing to assume our credit risk,as issuer of the notes, and BAC's credit risk, as guarantor of the notes,for all payments under the notes, including the Redemption Amount.
  • You believe that the Index will decrease from the Starting Value to the Ending Value or that it will not increase sufficiently over the term of the notes to provide you with your desired return.
  • You seek principal repayment or preservation of capital.
  • You seek an uncapped return on your investment.
  • You seek interest payments or other current income on your investment.
  • You want to receive dividends or other distributions paid on the stocks included in the Index.
  • You seek an investment for which there will be a liquid secondary market.
  • You are unwilling or are unable to take market risk on the notes, to take our credit risk as issuer of the notes, or to take BAC's credit risk, as guarantor of the notes.

We urge you to consult your investment, legal, tax, accounting, and other advisors before you invest in the notes.

®

TS-3

Accelerated Return Notes

Accelerated Return Notes®

Linked to the EURO STOXX 50® Index, due December , 2020

Hypothetical Payout Profile and Examples of Payments at Maturity

The below graph is based on hypothetical numbers and values.

Accelerated Return Notes®

This graph reflects the returns on the notes, based on the Participation Rate of 300% and a Capped Value of $12.00 per unit (the midpoint of the Capped Value range of [$11.80 to $12.20]). The green line reflects the returns on the notes, while the dotted gray line reflects the returns of a direct investment in the stocks included in the Index, excluding dividends.

This graph has been prepared for purposes of illustration only.

The following table and examples are for purposes of illustration only. They are based onhypothetical values and show hypothetical returns on the notes. They illustrate the calculation of the Redemption Amount and total rate of return based on a hypothetical Starting Value of 100, the Participation Rate of 300%, a Capped Value of $12.00 per unit and a range of hypothetical Ending Values.The actual amount you receive and the resulting total rate of return will depend on the actual Starting Value, Ending Value, Capped Value, and whether you hold the notes to maturity. The following examples do not take into account any tax consequences from investing in the notes.

For recent actual levels of the Market Measure, see "The Index" section below. The Index is a price return index and as such the Ending Value will not include any income generated by dividends paid on the stocks included in the Index, which you would otherwise be entitled to receive if you invested in those stocks directly. In addition, all payments on the notes are subject to issuer and guarantor credit risk.

®

TS-4

Accelerated Return Notes

Accelerated Return Notes®

Linked to the EURO STOXX 50® Index, due December , 2020

Percentage Change from the Starting

Ending Value

Value to the Ending Value

Redemption Amount per Unit

Total Rate of Return on the Notes

0.00

-100.00%

$0.00

-100.00%

50.00

-50.00%

$5.00

-50.00%

80.00

-20.00%

$8.00

-20.00%

90.00

-10.00%

$9.00

-10.00%

94.00

-6.00%

$9.40

-6.00%

97.00

-3.00%

$9.70

-3.00%

100.00(1)

0.00%

$10.00

0.00%

102.00

2.00%

$10.60

6.00%

105.00

5.00%

$11.50

15.00%

110.00

10.00%

$12.00(2)

20.00%

120.00

20.00%

$12.00

20.00%

130.00

30.00%

$12.00

20.00%

140.00

40.00%

$12.00

20.00%

150.00

50.00%

$12.00

20.00%

160.00

60.00%

$12.00

20.00%

  1. The hypothetical Starting Value of 100 used in these examples has been chosen for illustrative purposes only, and does not represent a likely actual Starting Value for the Market Measure.
  2. The Redemption Amount per unit cannot exceed thehypothetical Capped Value.

®

TS-5

Accelerated Return Notes

This is an excerpt of the original content. To continue reading it, access the original document here.

Disclaimer

Bank of America Corporation published this content on 21 October 2019 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 21 October 2019 18:10:05 UTC

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