|
Filed
Pursuant to Rule 433
Registration
No. 333−136666
December
3, 2007
|
||
 |
|
STRUCTURED
EQUITY
PRODUCTS
|
|
New
Issue
|
Indicative
Terms
|
|
 |
||
|
THE
BEAR STEARNS COMPANIES INC.
|
||
|
Note
Linked to the Standard & Poor’s 500 Index®
Due: January
[l],
2009
|
||
|
INVESTMENT
HIGHLIGHTS
|
||
|
·
|
13
month term to maturity.
|
|
|
·
|
The
Notes are linked to the performance of the Standard & Poor’ 500
Index®
and are
not principal protected.
|
|
|
·
|
Issue
is a direct obligation of The Bear Stearns Companies Inc. (Rated
A1 by
Moody’s / A by S&P).
|
|
|
·
|
Issue
Price: 100.00% of the Principal Amount.
|
|
|
·
|
If,
at maturity, the Index Return is greater than zero, the Cash
Settlement
Value per Note will be equal to the $1,000.00 principal amount
of the Note
plus the product of (a) $1,000 multiplied by (b) the Upside
Participation
Rate and (c) the lesser of the Index Return and the Maximum
Index Return.
Thus, if the Final Index Level is greater than [107.00]%
of the Initial
Index Level, regardless of the extent to which the Final
Index Level is
greater than the Initial Index Level, we will pay you $[1,210.00]
per
Note, which represents a maximum return of [21.00]% on the
Notes.
|
|
|
·
|
If,
at maturity, the Index Return is less than or equal to zero
but greater
than or equal to the Trigger Level, the Cash Settlement Value
per Note
will be equal to the $1,000.00 principal amount of the
Note.
|
|
|
·
|
If,
at maturity,
the
Index Return is less than the Trigger Level, the Cash Settlement
Value per
Note will be equal to the $1,000.00 principal amount of the
Note plus the
product of (i) the Index Return minus the Trigger Level,
multiplied by
(ii) the Downside Participation Rate multiplied by (iii)
$1,000. Thus, if
the Index Return is less than the Trigger Level, for each
1% difference
between the Index Return and the Trigger Level, you will
lose an amount of
your Notes equal to 1.1111% multiplied by the $1,000.00 principal
amount
of your Notes.
|
|
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.
|
||
|
BEAR,
STEARNS & CO. INC.
STRUCTURED
EQUITY PRODUCTS
(212)
272-6928
|
|
|
-1-
|
Structured
Products
Group
|
|
TERMS
OF OFFERING
|
|
ISSUER:
|
The
Bear Stearns Companies Inc.
|
|
ISSUER’S
RATING:
|
A1
/
A (Moody’s / S&P)
|
|
CUSIP
NUMBER:
|
073928Z48
|
|
ISSUE
PRICE:
|
100.00%
of the Principal Amount.
|
|
PRINCIPAL
AMOUNT:
|
$[l]
|
|
DENOMINATIONS:
|
$1,000.00
per Note and $1,000.00 multiples thereafter
|
|
SELLING
PERIOD ENDS:
|
December
[l],
2007
|
|
SETTLEMENT
DATE:
|
December
[l],
2007
|
|
CALCULATION
DATE:
|
January
[l],
2009 unless such date is not an Index Business Day, in which case
the
Calculation Date shall be the next Index Business Day. The Calculation
Date is subject to adjustment as described in the Pricing Supplement
under
“Description of the Notes - Market Disruption Events.”
|
|
MATURITY
DATE:
|
The
Notes are expected to mature on January [l],
2009 unless such date is not an Business Day, in which case the
Maturity
Date shall be the next Business Day. If the Calculation Date is
adjusted
due to the occurrence of a Market Disruption Event, the Maturity
Date will
be three Business Days following the adjusted Calculation
Date.
|
|
CASH
SETTLEMENT VALUE:
|
On
the Maturity Date, you will receive the Cash Settlement Value,
an amount
in cash that depends upon the Index Return. The Cash Settlement
Value, per
Note, will be calculated as follows:
|
|
(i) If,
at maturity, the Index Return is greater than zero, the Cash Settlement
Value will be equal to the $1,000.00 principal amount of the Note
plus the
product of (a) $1,000 multiplied by (b) the Upside Participation
Rate and
(c) the lesser of the Index Return and the Maximum Index Return.
Thus, if
the Final Index Level is greater than [107.00]% of the Initial
Index
Level, regardless of the extent to which the Final Index Level
is greater
than the Initial Index Level, we will pay you $[1,210.00] per Note,
which
represents a maximum return of [21.00]% on the Notes.
|
|
|
(ii) If,
at maturity, the Index Return is less than or equal to zero but
greater
than or equal to the Trigger Level, the Cash Settlement Value per
Note
will be equal to the $1,000.00 principal amount of the
Note.
|
|
|
(iii) If,
at maturity, the Index Return is less than the Trigger Level, the
Cash
Settlement Value will be equal to the $1,000.00 principal amount
of the
Note plus the product of (i) the Index Return minus the Trigger
Level,
multiplied by (ii) the Downside Participation Rate multiplied by
(iii)
$1,000. Thus, if the Index Return is less than the Trigger Level,
for each
1% difference between the Index Return and the Trigger Level, you
will
lose an amount of your Notes equal to 1.1111% multiplied by the
$1,000.00
principal amount of your Notes.
|
|
|
INDEX
RETURN:
|
Equals
the quotient of (a) the Final Index Level minus the Initial Index
Level,
divided by (b) the Initial Index Level.
|
|
MAXIMUM
INDEX RETURN:
|
Equals
the quotient of (a) [21.00]% divided by (b) three.
|
|
TRIGGER
LEVEL:
|
-10.00%
|
|
UPSIDE
PARTICIPATION RATE:
|
300.00%
|
|
BEAR,
STEARNS & CO.
INC.
|
-2-
|
Structured
Products
Group
|
|
DOWNSIDE
PARTICIPATION RATE:
|
Equals
the quotient of (a) one divided by (b) 0.90, expressed as a
percentage.
|
|
INITIAL
INDEX LEVEL:
|
Equals
[l],
the closing level of the Index on December [l],
2007.
|
|
FINAL
INDEX LEVEL:
|
The
Final Index Level will be determined by the Calculation Agent and
will
equal the closing level of the Index on the Calculation
Date.
|
|
EXCHANGE
LISTING:
|
The
Notes will not be listed on any securities exchange or quotation
system.
|
|
INDEX
BUSINESS DAY:
|
Means
any day on which the Primary Exchange (as defined in the Pricing
Supplement) and each Related Exchange (as defined in the Pricing
Supplement) are scheduled to be open for trading.
|
|
BUSINESS
DAY:
|
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.
|
|
CALCULATION
AGENT:
|
Bear,
Stearns & Co. Inc.
|
|
INDEX:
|
Standard
& Poor’s 500 Index®
(ticker “SPX”), as published, calculated and disseminated by Standard
& Poor’s, a division of The McGraw Hill Companies, Inc. (the
“Sponsor”).
|
|
BEAR,
STEARNS & CO.
INC.
|
-3-
|
Structured
Products
Group
|
|
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 December 3, 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 December 3, 2007 (subject to completion):
|
| · |
Prospectus
Supplement dated August 16, 2006:
|
| · |
Prospectus
dated August 16, 2006:
|
|
ILLUSTRATIVE
HYPOTHETICAL CASH SETTLEMENT VALUE
TABLE
|
The
following tables and graphs are for illustrative purposes and are not
indicative
of the future performance of the Index or the future value of the
Notes.
Because
the level of the Index may be subject to significant fluctuation over
the term
of the Notes, it is not possible to present a chart or table illustrating
the
complete range of all possible Cash Settlement Values. Therefore, the
examples
do not purport to be representative of every possible scenario concerning
increases or decreases in the Index during the term of the Notes. You
should not
construe these examples or the data included in any table or graph below
as an
indication or assurance of the expected performance of the Notes. Numbers
may be
rounded for ease of use.
You
can
review the historical levels of the Index in the section of this pricing
supplement called “Description of the Index.” The historical performance of the
Index included in this pricing supplement should not be taken as an indication
of the future performance of the Index during the term of the Notes.
It is
impossible to predict whether the Final Index Level will be greater than
or less
than the Initial Index Level.
The
examples demonstrating the hypothetical Cash Settlement Value of a Note
are
based on the following assumptions:
| · |
Investor
purchases $1,000.00 aggregate principal amount of Notes at
the initial
public offering price of $1,000.00.
|
| · |
Investor
holds the Notes to maturity.
|
| · |
The
Initial Index Level is equal to
1,480.00.
|
| · |
The
maximum return on the Notes is 21.00%.
|
| · |
All
returns are based on an 13-month term; pre-tax
basis.
|
| · |
No
Market Disruption Events occur during the term of the
Notes.
|
Example
1: The Index Return is positive and greater than the Maximum Index
Return.
In
this
example, the Index rises over the term of the Notes. On the Calculation
Date,
the Final Index Level is 2,072.00, representing an Index Return of 40.00%.
In
this example, because the Index Return is greater than the Maximum Index
Return,
the Cash Settlement Value would be $1,210.00, as calculated below.
|
BEAR,
STEARNS & CO.
INC.
|
-4-
|
Structured
Products
Group
|
If
the
Index Return is positive, the Cash Settlement Value will be equal to
the
$1,000.00 principal amount of the Notes plus the product of (a) $1,000.00
multiplied by (b) the Upside Participation Rate and (c) the lesser of
the Index
Return and the Maximum Index Return. In this example, since the Index
Return is
greater than the Maximum Index Return, the Cash Settlement Value on the
Maturity
Date would be $1,210.00, which is equal to the $1,000.00 principal amount
of the
Notes plus the product of (i) $1,000.00 multiplied by (ii) 300.00% multiplied
by
(iii) the quotient of 21.00% divided by three. This example illustrates
the fact
that the return on your Notes will be limited to the maximum return on
the Notes
of 21.00% if the Index Return is greater than the Maximum Index
Return.
Example
2: The Index Return is positive but less than the Maximum Index
Return.
In
this
example, the Index rises over the term of the Notes. On the Calculation
Date,
the Final Index Level is 1,554.00, representing an Index Return of 5.00%,
as
calculated below.
In
this
example, because the Index Return is less than the Maximum Index Return,
the
Cash Settlement Value would be $1,150.00, as calculated below.
In
this
example, the level of the Index rises 5.00% over the term of the Notes,
and your
return on investment would be 15.00%.
Example
3: The Index Return is negative, but is greater than the Trigger Level.
In
this
example, the Index declines over the term of the Notes. On the Calculation
Date,
the Final Index Level is 1,361.60, representing an Index Return of -8.00%,
as
calculated below.
Since
the
Index Return is negative but is greater than the Trigger Level, the Cash
Settlement Value would equal the $1,000.00 principal amount of the
Note.
In
this
example, the level of the Index decreases 8.00% over the term of the
Notes, and
your return on investment would be 0.00%.
Example
4: The Index Return is negative and is less than the Trigger Level.
In
this
example, the Index declines over the term of the Notes. On the Calculation
Date,
the Final Index Level is 1,036.00, representing an Index Return of -30.00%,
as
calculated below.
|
BEAR,
STEARNS & CO.
INC.
|
-5-
|
Structured
Products
Group
|
In
this
example, because the Index Return is less than the Trigger Level the
Cash
Settlement Value would be $777.78, as calculated below.
This
example demonstrates that if the Index Return is less than the Trigger
Level,
such negative Index Return will be amplified by the Downside Participation
Rate.
If the Index Return is less than the Trigger Level, you will lose some
or
possibly all of your initial investment in the Notes.
|
BEAR,
STEARNS & CO.
INC.
|
-6-
|
Structured
Products
Group
|
Summary
of Examples 1 Through 4
Reflecting
the Cash Settlement Value
|
Example
1
|
Example
2
|
Example
3
|
Example
4
|
||||
|
Initial
Index Level
|
1,480.00
|
1,480.00
|
1,480.00
|
1,480.00
|
|||
|
Hypothetical
Final Index Level
|
2,072.00
|
1,554.00
|
1,361.60
|
1,036.00
|
|||
|
Value
of Final Index Level relative to the Initial Index Level
|
Higher
|
Higher
|
Lower
|
Lower
|
|||
|
Principal
fully repaid?
|
Yes
|
Yes
|
Yes
|
No
|
|||
|
Cash
Settlement Value per Note
|
$1,210.00
|
$1,150.00
|
$1,000.00
|
$777.78
|
Table
of Hypothetical Cash Settlement Values
|
Initial
Index Level
|
Final
Index Level
|
Index
Return
|
Cash
Settlement Value Per Note
|
Return
if Held to Maturity
|
Initial
Index Level
|
Final
Index Level
|
Index
Return
|
Cash
Settlement Value Per Note
|
Return
if Held to Maturity
|
|
|
1,480.00
|
2,068.00
|
+39.73%
|
$
1,210.00
|
21.00%
|
1,480.00
|
1,459.00
|
-1.42%
|
$
1000.00
|
0.00%
|
|
|
1,480.00
|
2,047.00
|
+38.31%
|
$
1,210.00
|
21.00%
|
1,480.00
|
1,438.00
|
-2.84%
|
$
1000.00
|
0.00%
|
|
|
1,480.00
|
2,026.00
|
+36.89%
|
$
1,210.00
|
21.00%
|
1,480.00
|
1,417.00
|
-4.26%
|
$
1000.00
|
0.00%
|
|
|
1,480.00
|
2,005.00
|
+35.47%
|
$
1,210.00
|
21.00%
|
1,480.00
|
1,396.00
|
-5.68%
|
$
1000.00
|
0.00%
|
|
|
1,480.00
|
1,984.00
|
+34.05%
|
$
1,210.00
|
21.00%
|
1,480.00
|
1,375.00
|
-7.09%
|
$
1000.00
|
0.00%
|
|
|
1,480.00
|
1,963.00
|
+32.64%
|
$
1,210.00
|
21.00%
|
1,480.00
|
1,354.00
|
-8.51%
|
$
1000.00
|
0.00%
|
|
|
1,480.00
|
1,942.00
|
+31.22%
|
$
1,210.00
|
21.00%
|
1,480.00
|
1,333.00
|
-9.93%
|
$
1000.00
|
0.00%
|
|
|
1,480.00
|
1,921.00
|
+29.80%
|
$
1,210.00
|
21.00%
|
1,480.00
|
1,312.00
|
-11.35%
|
$
984.98
|
-1.50%
|
|
|
1,480.00
|
1,900.00
|
+28.38%
|
$
1,210.00
|
21.00%
|
1,480.00
|
1,291.00
|
-12.77%
|
$
969.22
|
-3.08%
|
|
|
1,480.00
|
1,879.00
|
+26.96%
|
$
1,210.00
|
21.00%
|
1,480.00
|
1,270.00
|
-14.19%
|
$
953.45
|
-4.65%
|
|
|
1,480.00
|
1,858.00
|
+25.54%
|
$
1,210.00
|
21.00%
|
1,480.00
|
1,249.00
|
-15.61%
|
$
937.69
|
-6.23%
|
|
|
1,480.00
|
1,837.00
|
+24.12%
|
$
1,210.00
|
21.00%
|
1,480.00
|
1,228.00
|
-17.03%
|
$
921.92
|
-7.81%
|
|
|
1,480.00
|
1,816.00
|
+22.70%
|
$
1,210.00
|
21.00%
|
1,480.00
|
1,207.00
|
-18.45%
|
$
906.16
|
-9.38%
|
|
|
1,480.00
|
1,795.00
|
+21.28%
|
$
1,210.00
|
21.00%
|
1,480.00
|
1,186.00
|
-19.86%
|
$
890.39
|
-10.96%
|
|
|
1,480.00
|
1,774.00
|
+19.86%
|
$
1,210.00
|
21.00%
|
1,480.00
|
1,165.00
|
-21.28%
|
$
874.62
|
-12.54%
|
|
|
1,480.00
|
1,753.00
|
+18.45%
|
$
1,210.00
|
21.00%
|
1,480.00
|
1,144.00
|
-22.70%
|
$
858.86
|
-14.11%
|
|
|
1,480.00
|
1,732.00
|
+17.03%
|
$
1,210.00
|
21.00%
|
1,480.00
|
1,123.00
|
-24.12%
|
$
843.09
|
-15.69%
|
|
|
1,480.00
|
1,711.00
|
+15.61%
|
$
1,210.00
|
21.00%
|
1,480.00
|
1,102.00
|
-25.54%
|
$
827.33
|
-17.27%
|
|
|
1,480.00
|
1,690.00
|
+14.19%
|
$
1,210.00
|
21.00%
|
1,480.00
|
1,081.00
|
-26.96%
|
$
811.56
|
-18.84%
|
|
|
1,480.00
|
1,669.00
|
+12.77%
|
$
1,210.00
|
21.00%
|
1,480.00
|
1,060.00
|
-28.38%
|
$
795.80
|
-20.42%
|
|
|
1,480.00
|
1,648.00
|
+11.35%
|
$
1,210.00
|
21.00%
|
1,480.00
|
1,039.00
|
-29.80%
|
$
780.03
|
-22.00%
|
|
|
1,480.00
|
1,627.00
|
+9.93%
|
$
1,210.00
|
21.00%
|
1,480.00
|
1,018.00
|
-31.22%
|
$
764.26
|
-23.57%
|
|
|
1,480.00
|
1,606.00
|
+8.51%
|
$
1,210.00
|
21.00%
|
1,480.00
|
997.00
|
-32.64%
|
$
748.50
|
-25.15%
|
|
|
1,480.00
|
1,585.00
|
+7.09%
|
$
1,210.00
|
21.00%
|
1,480.00
|
976.00
|
-34.05%
|
$
732.73
|
-26.73%
|
|
|
1,480.00
|
1,564.00
|
+5.68%
|
$
1,170.27
|
17.03%
|
1,480.00
|
955.00
|
-35.47%
|
$
716.97
|
-28.30%
|
|
|
1,480.00
|
1,543.00
|
+4.26%
|
$
1,127.70
|
12.77%
|
1,480.00
|
934.00
|
-36.89%
|
$
701.20
|
-29.88%
|
|
|
1,480.00
|
1,522.00
|
+2.84%
|
$
1,085.14
|
8.51%
|
1,480.00
|
913.00
|
-38.31%
|
$
685.44
|
-31.46%
|
|
|
1,480.00
|
1,501.00
|
+1.42%
|
$
1,042.57
|
4.26%
|
1,480.00
|
892.00
|
-39.73%
|
$
669.67
|
-33.03%
|
|
|
1,480.00
|
1,480.00
|
0.00%
|
$
1,000.00
|
0.00%
|
1,480.00
|
871.00
|
-41.15%
|
$
653.90
|
-34.61%
|
|
BEAR,
STEARNS & CO.
INC.
|
-7-
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Structured
Products
Group
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BEAR,
STEARNS & CO.
INC.
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-8-
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Structured
Products
Group
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SELECTED
RISK CONSIDERATIONS
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Suitability
of Note 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.
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Possible
loss of principal -
The Notes are not principal protected. If, at maturity,
the Index Return
is less than the Trigger Level, there will be no principal
protection on
the Notes and the Cash Settlement Value you will receive
will be less than
the initial offering price. In that case, you will
receive less, and
possibly significantly less, than your initial investment
in the
Notes.
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Maximum
return of 21.00% - You will not receive more than the
Maximum Index Return of 7.00% at maturity. Because
the Maximum Index
Return on the Notes is 7.00%, the maximum Cash Settlement
Value is
$1,210.00. Therefore, the Cash Settlement Value will
not reflect the
increase in the value of the Notes if the Initial
Index Level increases by
more than 7.00%.
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No
interest, dividend or other payments -
You
will not receive any interest, dividend payments or
other distributions on
the stocks underlying the Index, nor will such payments
be included in the
calculation of the Cash Settlement Value you will receive
at
maturity.
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Not
exchange listed -
The
Notes will not be listed on any securities exchange
or quotation system,
and we do not expect a trading market to develop, which
may affect the
price that you receive for your Notes upon any sale
prior to maturity. If
you sell the Notes prior to maturity, you may receive
less, and possibly
significantly less, than your initial investment in
the
Notes.
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Liquidity -
Because
the Notes will not be listed on any securities exchange
or quotation
system, we do not expect a trading market to develop,
and, if such a
market were to develop, it may not be liquid. Our subsidiary,
Bear,
Stearns & Co. Inc. has advised us that they intend under ordinary
market conditions to indicate prices for the Notes
on request. However, we
cannot guarantee that bids for outstanding Notes will
be made in the
future; nor can we predict the price at which those
bids will be made. In
any event, Notes will cease trading as of the close
of business on the
Maturity Date.
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Taxes -
The U.S. federal income tax consequences of an investment
in the Notes are
complex and uncertain. We intend to treat the Notes
for all tax purposes
as pre-paid cash-settled executory contracts linked
to the level of the
Index and, where required, to file information returns
with the Internal
Revenue Service in accordance with such treatment.
Prospective investors
are urged to consult their tax advisors regarding the
U.S. federal income
tax consequences of an investment in the Notes. Assuming
the Notes are
treated as pre-paid cash-settled executory contracts,
you should be
required to recognize capital gain or loss to the extent
that the cash you
receive on the Maturity Date or upon a sale or exchange
of the Notes prior
to the Maturity Date differs from your tax basis on
the Notes (which will
generally be the amount you paid for the Notes).
You should review the discussion under the section
entitled “Certain U.S.
Federal Income Tax Considerations” in
the Pricing Supplement.
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BEAR,
STEARNS & CO.
INC.
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-9-