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Filed
Pursuant to Rule 433
Registration
No. 333−136666
November
19, 2007
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STRUCTURED
EQUITY
PRODUCTS
Indicative
Terms
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New
Issue
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 |
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THE
BEAR STEARNS COMPANIES INC.
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Principal
Protected Leveraged Lookback Notes Linked to
the
Strengthening of the Brazilian Real, Russian Ruble, Indian Rupee
and
Chinese
Yuan Exchange Rates against the U.S. Dollar
Due: November
[l],
2009
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INVESTMENT
HIGHLIGHTS
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·
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2
year term to maturity.
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|
·
|
The
Notes are 100% principal protected if held to maturity.
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·
|
Issue
is a direct obligation of The Bear Stearns Companies Inc. (Rated
“A1” by
Moody’s / “A” by S&P).
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·
|
Issue
Price: 100.00% of the Principal Amount.
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|
·
|
Linked
to an equally weighted basket consisting of the currency exchange
rates
between: (1) the U.S. Dollar and the Brazilian Real; (2) the
U.S. Dollar
and the Russian Ruble; (3) the U.S. Dollar and the Indian Rupee;
and (4)
the U.S. Dollar and the Chinese Yuan, each expressed as the number
of
units of the U.S. Dollar, per Brazilian Real, Russian Ruble,
Indian Rupee
or Chinese Yuan (each a “Reference Currency” and collectively the
“Reference Currencies”), as applicable. The
weighting of each Component is fixed at 25% and will not change,
unless
any Component is modified during the term of the Notes.
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·
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If,
at maturity, the Highest Basket Performance is greater than 0%,
the Cash
Settlement Value per note will equal $1,000 plus the product
of: (a)
$1,000 multiplied by (b) the Participation Rate multiplied by
(c) the
Highest Basket Performance.
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·
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If,
at maturity, the Highest Basket Performance is less than or equal
to 0%,
the Cash Settlement Value per Note will equal $1,000. Because
the Notes
are 100% principal protected if held to maturity, in no event
will the
Cash Settlement Value at maturity be less than $1,000 per
Note.
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·
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The
Participation Rate is [170.00]%.
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·
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The
Highest Basket Performance is equal to the greatest of the four
Basket
Performances.
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·
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The
Basket Performance, with respect to an Observation Date, is equal
to the
quotient (expressed as a percentage) of (i) the sum of the four
Component
Performances, for such Observation Date, divided by (ii) 4. The
“Component
Performance” with respect to each Component on the applicable Observation
Date, is the percentage resulting from the quotient of (a) the
applicable
Observation Fixing Level minus the Initial Fixing Level, divided
by (b)
the Initial Fixing Level. For the avoidance of doubt, the Basket
Performance is greater when the Exchange Rates, on average, increase,
as
increasing Exchange Rates mean that fewer units of the respective
Reference Currency are required to purchase one U.S.
Dollar.
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|
BEAR,
STEARNS & CO. INC.
STRUCTURED
EQUITY PRODUCTS
(212)
272-6928
|
The
issuer has filed a registration statement (including a prospectus)
with
the SEC for the offering to which this free writing prospectus
relates.
Before you invest, you should read the prospectus in that registration
statement and other documents the issuer has filed with the SEC
for more
complete information about the issuer and this offering. You
may get these
documents for free by visiting EDGAR on the SEC Web site at www.sec.gov.
Alternatively, the issuer, any underwriter or any dealer participating
in
the offering will arrange to send you the prospectus if you request
it by
calling toll free 1-866-803-9204.
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-1-
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STRUCTURED
PRODUCTS GROUP
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GENERAL
TERMS FOR THE NOTE
OFFERING
|
This
free writing prospectus relates to the offering of Notes linked to an
equally
weighted basket consisting of the currency exchange rates between: (1)
the U.S.
Dollar and the Brazilian Real; (2) the U.S. Dollar and the Russian Ruble;
(3)
the U.S. Dollar and the Indian Rupee; and (4) the U.S. Dollar and the
Chinese
Yuan, each expressed as the number of units of the U.S. Dollar, per Brazilian
Real, Russian Ruble, Indian Rupee or Chinese Yuan, as applicable. We
reserve the
right to withdraw, cancel or modify the offering and to reject orders
in whole
or in part. Defined terms not defined herein shall have the same
meaning as in the Prospectus Supplement discussed
below.
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ISSUER:
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The
Bear Stearns Companies Inc.
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ISSUER’S
RATING:
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“A1”
/ “A” (Moody’s / S&P)
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CUSIP
NUMBER:
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073928Z30
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ISSUE
PRICE:
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100.00%
of the Principal Amount.
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AGGREGATE
PRINCIPAL AMOUNT:
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$[●]
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DENOMINATIONS:
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$1,000
per Note and $1,000 multiples thereafter.
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INITIAL
FIXING DATE:
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November
[●],
2007
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ISSUE
DATE:
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November
[●],
2007
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OBSERVATION
DATES:
|
May
[●],
2008; November [●],
2008; May [●],
2009; and November [●],
2009 (the “Final Observation Date”); provided that, with respect to a
Component, (i) if such date is not a Component Business Day
(as defined
herein) for that Component, then the Observation Date for that
Component
will be the next succeeding day that is a Component Business
Day for that
Component and (ii) if a Market Disruption Event (as defined
herein) exists
for that Component on the Observation Date, the Observation
Date for that
Component will be the next Component Business Day for that
Component on
which a Market Disruption Event does not exist for that Component.
If the
Observation Date for any Component is postponed for three consecutive
Component Business Days due to the existence of a Market Disruption
Event,
then, notwithstanding the existence of a Market Disruption
Event on that
third Component Business Day, that third Component Business
Day will be
the Observation Date for that Component. If no Market Disruption
Event
exists with respect to a Component on the Observation Date,
the
determination of that Component’s Observation Level will be made on the
Observation Date, irrespective of the existence of a Market
Disruption
Event with respect to one or more of the other
Components.
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MATURITY
DATE:
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The
Notes are expected to mature on November [●],
2009 unless such date is not a Business Day, in which case
the Maturity
Date shall be the next Business Day. If the Final Observation
Date is
postponed, the Maturity Date will be three Business Days following
the
Final Observation Date, as postponed for the last Component
for which an
Observation Fixing Level is determined.
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CASH
SETTLEMENT VALUE:
|
On
the Maturity Date, you will receive the Cash Settlement Value,
an amount
in cash that is based on the Highest Basket
Performance:
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If,
at maturity, the Highest Basket Performance is greater than
0%, the Cash
Settlement Value per note will equal $1,000 plus the product
of: (a)
$1,000 multiplied by (b) the Participation Rate multiplied
by (c) the
Highest Basket Performance.
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|
|
If,
at maturity, the Highest Basket Performance is less than or
equal to 0%,
the Cash Settlement Value per Note will equal $1,000. Because
the Notes
are 100% principal protected if held to maturity, in no event
will the
Cash Settlement Value at maturity be less than $1,000 per
Note.
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INITIAL
FIXING LEVEL:
|
[●]
with respect to the BRL Exchange Rate; [●] with respect to the RUB
Exchange Rate; [●] with respect to the INR Exchange Rate; and [●] with
respect to the CNY Exchange Rate which, in each case, represents
the
Currency Exchange Rate of such Component on the Initial Fixing
Date.
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BEAR,
STEARNS & CO. INC.
-2-
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STRUCTURED
PRODUCTS GROUP
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OBSERVATION
FIXING LEVEL:
|
With
respect to each Component, the Currency Exchange Rate on the
relevant
Observation Date (referred to as “BRL Observation”, “RUB Observation”,
“INR Observation” and “CNY Observation”, as applicable), as determined by
the Calculation Agent.
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BASKET:
|
The
Basket is comprised of the currency exchange rates between:
(1) the U.S.
Dollar and the Brazilian Real (the “BRL Exchange Rate”); (2) the U.S.
Dollar and the Russian Ruble (the “RUB Exchange Rate”); (3) the U.S.
Dollar and the Indian Rupee (the “INR Exchange Rate”); and (4) the U.S.
Dollar and the Chinese Yuan (the “CNY Exchange Rate” and, together with
the BRL Exchange Rate, the RUB Exchange Rate and the INR Exchange
Rate,
each a “Component” and collectively the “Components”), each expressed as
the number of units of the U.S. Dollar, per Brazilian Real,
Russian Ruble,
Indian Rupee or Chinese Yuan (each a “Reference Currency”), as applicable.
The weighting of each Component is fixed at 25% and will not
change,
unless any Component is modified during the term of the
Notes.
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HIGHEST
BASKET PERFORMANCE:
|
Will
be equal to the greatest of the four Basket
Performances.
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BASKET
PERFORMANCE:
|
With
respect to an Observation Date, is equal to the quotient (expressed
as a
percentage) of (i) the sum of the four Component Performances,
for such
Observation Date, divided by (ii) 4.
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For
the avoidance of doubt, the Basket Performance is greater when
the
Exchange Rates, on average, increase, as increasing Exchange
Rates mean
that fewer units of the respective Reference Currency are required
to
purchase one U.S. Dollar.
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COMPONENT
PERFORMANCE:
|
With
respect to each Component, on the applicable Observation Date,
is the
percentage resulting from the quotient of (a) the applicable
Observation
Fixing Level minus the Initial Fixing Level, divided by (b)
the Initial
Fixing Level.
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PARTICIPATION
RATE:
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[170.00]%.
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CURRENCY
EXCHANGE RATE:
|
With
respect to each Component, the quotient of (i) one divided
by (ii) the
number of units of the applicable Reference Currency which
can be
exchanged for one unit of the U.S. Dollar as stated on the
Fixing Page on
the applicable Observation Date.
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If,
with respect to a Component, no fixing is published on any
Observation
Date or the Initial Fixing Date, the relevant fixing level
shall be
determined by the Calculation Agent for such Observation Date
or the
Initial Fixing Date, as applicable.
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FIXING
PAGE:
|
With
respect to the BRL Exchange Rate, the ask side exchange rate
published on
Bloomberg page BZFXPTAX <Currency> <Go>; with respect to the
RUB Exchange Rate, the spot exchange rate published on Reuters
page EMTA;
with respect to the INR Exchange Rate, the reference rate published
on
Bloomberg page INRRATE <Currency> <Go>; and with respect to
the CNY Exchange Rate, the reference rate published on Bloomberg
page
CYCFUSD <Currency> <Go>.
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BUSINESS
DAY:
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Means
any day other than a Saturday or Sunday, on which banking institutions
in
the cities of New York, New York and London, England are not
authorized or
obligated by law or executive order to be closed.
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COMPONENT
BUSINESS DAY:
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With
respect to any Component, any day other than a Saturday or
Sunday, on
which banking institutions in the cities of (i) New York, New
York, (ii)
London, England, and (iii) the Local Jurisdiction are not authorized
or
obligated by law or executive order to close.
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LOCAL
JURISDICTION:
|
With
respect to the BRL Exchange Rate: São Paulo, Brazil; with respect to the
RUB Exchange Rate: Moscow, Russia; with respect to the INR
Exchange Rate:
Mumbai, India; and with respect to the CNY Exchange Rate: Beijing,
China.
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BEAR,
STEARNS & CO. INC.
-3-
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STRUCTURED
PRODUCTS GROUP
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ADDITIONAL
TERMS SPECIFIC TO THE
NOTES
|
You
should read this document together with the prospectus and prospectus
supplement, each dated August 16, 2006 (the “Prospectus” and “Prospectus
Supplement,” respectively), and the more detailed information contained in the
Pricing Supplement, dated November 19, 2007 (subject to completion) (the
“Pricing Supplement”). You should carefully consider, among other things, the
matters set forth in “Risk Factors” in the Prospectus Supplement and the Pricing
Supplement, as the Notes involve risks not associated with conventional debt
securities. We urge you to consult your investment, legal, tax, accounting
and
other advisers before you invest in the Notes. You may access the Pricing
Supplement, the Prospectus Supplement and the Prospectus on the SEC web site
as
follows:
|
·
|
Pricing
Supplement dated November 19, 2007:
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·
|
Prospectus
Supplement dated August 16, 2006:
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|
·
|
Prospectus
dated August 16, 2006:
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ILLUSTRATIVE
CASH SETTLEMENT VALUE
TABLES
|
The
following illustrative examples demonstrating the hypothetical Cash Settlement
Value of a Note are based on the assumptions outlined below. The examples
do not
purport to be representative of every possible scenario concerning increases
or
decreases in the Components or the Basket Performances. You should not construe
these examples as an indication or assurance of the expected performance
of the
Notes. Actual returns may be different. Numbers are rounded for the ease
of use.
These illustrative examples demonstrating the hypothetical Cash Settlement
Value
of a Note are based on the following assumptions:
ASSUMPTIONS:
|
·
|
Investor
purchases $1,000 aggregate principal amount of Notes at the initial
public
offering price of $1,000.
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·
|
Investor
holds the Notes to maturity.
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|
·
|
The
Initial Fixing Level is 0.5456 with respect to the BRL Exchange
Rate;
0.0402 with respect to the RUB Exchange Rate; 0.0251 with respect
to the
INR Exchange Rate; and 0.1332 with respect to the CNY Exchange
Rate.
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|
·
|
The
Participation Rate is 170.00%
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|
·
|
All
returns are based on a 2-year term; pre-tax
basis.
|
|
·
|
No
Market Disruption Events or Events of Default occur during the
term of the
Notes.
|
BEAR,
STEARNS & CO. INC.
-4-
|
|
STRUCTURED
PRODUCTS GROUP
|
Hypothetical
Example 1: The Basket Performance is negative on the first Observation Date,
yet
steadily appreciates over the term of the Notes.
Step
1: Calculate the Highest Basket Performance.
|
BRL
Exchange
Rate
|
RUB
Exchange
Rate
|
INR
Exchange
Rate |
CNY
Exchange
Rate
|
Basket
Performance
|
||||||
|
Initial
Fixing Level
|
0.5456
|
0.0402
|
0.0251
|
0.1332
|
--
|
|||||
|
First
Observation Fixing Level
|
0.5447
|
0.0357
|
0.0250
|
0.1342
|
-2.75%
|
|||||
|
Second
Observation Fixing Level
|
0.5633
|
0.0352
|
0.0268
|
0.1595
|
4.33%
|
|||||
|
Third
Observation Fixing Level
|
0.6070
|
0.0366
|
0.0279
|
0.1707
|
10.40%
|
|||||
|
Fourth
Observation Fixing Level
|
0.6003
|
0.0423
|
0.0321
|
0.1764
|
18.89%
|
In
this
example, the Highest Basket Performance is 18.89%.
Step
2: Calculate the Cash Settlement Value at maturity.
Because
the Highest Basket Performance is greater than 0%, the Cash Settlement Value
per
Note is equal to $1,000 plus the product of (a) $1,000 multiplied
by
(b) the
Participation Rate multiplied
by
(c) the
Highest Basket Performance (or, $1,000 + ($1,000 x 170.00% x 18.89%)).
Therefore, the Cash Settlement Value at maturity is $1,321.17 per Note
representing a 32.12% return on investment over the term of the Notes. This
example illustrates that although the Basket Performance may be negative
on one
or more Observation Dates, the Cash Settlement Value payable at maturity
is
based on the Highest Basket Performance over the term of the Notes.
Hypothetical
Example 2: The Basket Performance appreciates over the first three Observation
Dates, and declines as of the Final Observation Date.
Step
1: Calculate the Highest Basket Performance.
|
BRL
Exchange
Rate
|
RUB
Exchange
Rate
|
INR
Exchange
Rate
|
CNY
Exchange
Rate
|
Basket
Performance
|
||||||
|
Initial
Fixing Level
|
0.5456
|
0.0402
|
0.0251
|
0.1332
|
--
|
|||||
|
First
Observation Fixing Level
|
0.5913
|
0.0448
|
0.0251
|
0.1361
|
5.50%
|
|||||
|
Second
Observation Fixing Level
|
0.6262
|
0.0521
|
0.0254
|
0.1425
|
13.14%
|
|||||
|
Third
Observation Fixing Level
|
0.6196
|
0.0507
|
0.0285
|
0.1509
|
16.63%
|
|||||
|
Fourth
Observation Fixing Level
|
0.5979
|
0.0507
|
0.0253
|
0.1464
|
11.60%
|
In
this
example, the Highest Basket Performance is 16.63%.
Step
2: Calculate the Cash Settlement Value at maturity.
Because
the Highest Basket Performance is greater than 0%, the Cash Settlement Value
per
Note is equal to $1,000 plus the product of (a) $1,000 multiplied
by
(b) the
Participation Rate multiplied
by
(c) the
Highest Basket Performance (or, $1,000 + ($1,000 x 170.00% x 16.63%)).
Therefore, the Cash Settlement Value at maturity is $1,282.70 per Note
representing a 28.27% return on investment over the term of the Notes. This
example illustrates that although the Basket Performance may decline as of
the
Final Observation Date, the Cash Settlement Value payable at maturity is
based
on the Highest Basket Performance over the term of the Notes.
BEAR,
STEARNS & CO. INC.
-5-
|
|
STRUCTURED
PRODUCTS GROUP
|
Hypothetical
Example 3: The Basket Performance is negative on two Observation Dates and
positive on the other two Observation Dates.
Step
1: Calculate the Highest Basket Performance.
|
BRL
Exchange
Rate
|
RUB
Exchange
Rate
|
INR
Exchange
Rate
|
CNY
Exchange
Rate
|
Basket
Performance
|
||||||
|
Initial
Fixing Level
|
0.5456
|
0.0402
|
0.0251
|
0.1332
|
--
|
|||||
|
First
Observation Fixing Level
|
0.5306
|
0.0394
|
0.0259
|
0.1204
|
-2.79%
|
|||||
|
Second
Observation Fixing Level
|
0.5387
|
0.0398
|
0.0291
|
0.1382
|
4.36%
|
|||||
|
Third
Observation Fixing Level
|
0.5203
|
0.0382
|
0.0285
|
0.1381
|
1.90%
|
|||||
|
Fourth
Observation Fixing Level
|
0.5247
|
0.0359
|
0.0267
|
0.1314
|
-2.38%
|
In
this
example, the Highest Basket Performance is 4.36%.
Step
2: Calculate the Cash Settlement Value at maturity.
Because
the Highest Basket Performance is greater than 0%, the Cash Settlement Value
per
Note is equal to $1,000 plus the product of (a) $1,000 multiplied
by
(b) the
Participation Rate multiplied
by
(c) the
Highest Basket Performance (or, $1,000 + ($1,000 x 170.00% x 4.36%)). Therefore,
the Cash Settlement Value at maturity is $1,074.08 per Note representing
a 7.41%
return on investment over the term of the Notes. This example illustrates
that
although the Basket Performance may be negative on the first and last
Observation Date, the Cash Settlement Value payable at maturity is based
on the
Highest Basket Performance over the term of the Notes.
Hypothetical
Example 4: The Basket Performance is negative on each Observation Date over
the
term of the Notes.
Step
1: Calculate the Highest Basket Performance.
|
BRL
Exchange
Rate |
RUB
Exchange Rate
|
INR
Exchange
Rate
|
CNY
Exchange
Rate
|
Basket
Performance
|
||||||
|
Initial
Fixing Level
|
0.5456
|
0.0402
|
0.0251
|
0.1332
|
--
|
|||||
|
First
Observation Fixing Level
|
0.5264
|
0.0381
|
0.0238
|
0.1284
|
-4.38%
|
|||||
|
Second
Observation Fixing Level
|
0.5220
|
0.0385
|
0.0234
|
0.1222
|
-5.90%
|
|||||
|
Third
Observation Fixing Level
|
0.5206
|
0.0349
|
0.0232
|
0.1142
|
-9.90%
|
|||||
|
Fourth
Observation Fixing Level
|
0.5075
|
0.0345
|
0.0253
|
0.1178
|
-7.98%
|
In
this
example, the Highest Basket Performance is -4.38%.
Step
2: Calculate the Cash Settlement Value at maturity.
Because
the Highest Basket Performance is less than 0%, the Cash Settlement Value
at
maturity is $1,000 per Note representing a 0.00% return on investment over
the
term of the Notes. This example illustrates that because the Notes are 100%
principal protected, in no event will the Cash Settlement Value, at maturity,
be
less than $1,000 per Note.
BEAR,
STEARNS & CO. INC.
-6-
|
|
STRUCTURED
PRODUCTS GROUP
|
|
HISTORICAL
DATA ON THE
COMPONENTS
|
The
graphs below were constructed using historical data regarding the Components.
The historical data is for illustrative purposes and is not indicative of
the
future performance of the Components or the future value of the Notes. While
the
value of the Components will determine the performance of the Basket, it
is
impossible to predict whether the performance of the Basket will rise or
fall
during the term of the Notes. Trading prices of the Components will be
influenced by both the complex and interrelated political, economic, financial
and other factors that can affect the currency markets generally and the
markets
for the Components in particular. Any historical upward or downward trend
in the
value of the Components during any period set forth below is not an indication
that the Components are more or less likely to increase or decrease at any
time
during the term of the Notes. All information in the tables that follow was
obtained from the Bloomberg Financial Service, without independent
verification.
The
graphs below set forth the historical currency exchange rates for each Component
(each expressed as the number of units of the U.S. Dollar which can be exchanged
for one unit of the respective Component) for the five year period beginning
October 25, 2002 and ending October 19, 2007.
BRL
Exchange Rate
BEAR,
STEARNS & CO. INC.
-7-
|
|
STRUCTURED
PRODUCTS GROUP
|
RUB
Exchange Rate
INR
Exchange Rate
BEAR,
STEARNS & CO. INC.
-8-
|
|
STRUCTURED
PRODUCTS GROUP
|
CNY
Exchange Rate
BEAR,
STEARNS & CO. INC.
-9-
|
|
STRUCTURED
PRODUCTS GROUP
|
|
SELECTED
RISK
CONSIDERATIONS
|
|
·
|
Suitability
of Notes for Investment -
A person should reach a decision to invest in the Notes
after carefully
considering, with his or her advisors, the suitability
of the Notes in
light of his or her investment objectives and the information
set out in
the Pricing Supplement. Neither the Issuer nor any dealer
participating in
the offering makes any recommendation as to the suitability
of the Notes
for investment.
|
|
|
·
|
Volatility
of the Components -
The Components are volatile and are affected by numerous
factors specific
to each country represented by a Reference Currency.
The value of each
Reference Currency relative to the U.S. Dollar, which
is primarily
affected by the supply and demand for the respective
Reference Currency
and the U.S. Dollar, may be affected by political, economic,
financial,
legal, accounting and tax matters specific to the country
in which the
Reference Currency is the official currency.
|
|
|
·
|
No
interest or other payments - During
the term of the Notes, you will not receive any periodic
interest or other
distributions and such payments will not be included
in the calculation of
the Cash Settlement Value payable at maturity.
|
|
|
·
|
Secondary Market
- Because the Notes will not be listed on any securities
exchange or
quotation system, a secondary trading market is not expected
to develop,
and, if such a market were to develop, it may not be
liquid. Bear, Stearns
& Co. Inc. intends under ordinary market conditions to
indicate prices
for the Notes on request. However, there can be no guarantee
that bids for
outstanding Notes will be made in the future; nor can
the prices of those
bids be predicted.
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Components
may not move in tandem — At
a time when the value of one or more of the Reference
Currencies
increases, the value of one or more of the other Reference
Currencies may
decline. Therefore, in calculating the Basket Performance
with respect to
an Observation Date, increases in the value of one or
more of the
Reference Currencies against the U.S. Dollar may be moderated,
or wholly
offset, by lesser increases or declines in the value
of one or more of the
other Reference Currencies against the U.S. Dollar.
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Not
subject to the special rules for nonfunctional currency
contingent payment
debt instruments —We
intend to treat the Notes as contingent payment debt
instruments that are
subject to taxation as described under the heading “Certain U.S. Federal
Income Tax Considerations-U.S. Federal Income Tax Treatment
of the Notes
as Indebtedness for U.S. Federal Income Tax Purposes-Contingent
Payment
Debt Instruments” in the accompanying prospectus
supplement.
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BEAR,
STEARNS & CO. INC.
-10-