 |
|
Free
Writing Prospectus
Filed
Pursuant to Rule 433
Registration
No. 333−136666
January
8, 2008
STRUCTURED
EQUITY PRODUCTS
|
|
|
Indicative
Terms
|
|
|
New
Issue
|
||
 |
||
|
THE
BEAR STEARNS COMPANIES INC.
|
||
|
Medium-Term
Notes
Linked
to a Portfolio of Indices
Due:
August [l],
2011
|
||
|
INVESTMENT
HIGHLIGHTS
|
||
|
·
|
3.5
year term to maturity.
|
|
|
·
|
The
Notes are 100% principal protected if held to maturity.
|
|
|
·
|
Issue
is a direct obligation of The Bear Stearns Companies Inc.
(Rated A2 by
Moody’s / A by S&P).
|
|
|
·
|
Issue
Price: 100.00% of the principal amount ($1,000 per Note)
([99.00]% for
investors who purchase a principal amount of at least
$1,000,000).
|
|
|
·
|
The
Notes are linked to the potential positive performance
of an
equally-weighted portfolio comprised of the following five
equity indices:
(1) the S&P 500®
Index (the “SPX”); (2) the Dow Jones EURO STOXX 50®
Index (the “SX5E”); (3) the Nikkei 225™ Stock Index (the “NKY”); (4) the
AMEX Hong Kong 30 Index (the “HKX”); and (5) the FTSE/Xinhua China 25
Index™ (the “XIN0I”) (each such index a “Component” and together the
“Portfolio”). The weighting of each Component within the Portfolio
is
fixed at 1/5, or 20.00%, and will not change during the
term of the Notes
unless one or more Components is modified during the term
of the
Notes.
|
|
|
·
|
The
Cash Settlement Value will be based on the appreciation,
if any, in the
Portfolio over the term of the Notes as measured by the
Portfolio Return.
The “Portfolio Return” is calculated as the equally-weighted average of
the five Index Performances, where “Index Performance” means, as of the
Final Observation Date and with respect to a Component,
the quotient,
expressed as a percentage, of (i) the arithmetic average
of the
Observation Levels for that Component minus its Initial
Component Level
divided by (ii) its Initial Component Level.
|
|
|
·
|
If
the Portfolio Return is greater than zero, then the Cash
Settlement Value
for each Note will be equal to the principal amount of
the Note, plus the
product of (a) $1,000 multiplied by (b) the Portfolio Return
multiplied by
(c) the Participation Rate.
|
|
|
·
|
If the
Portfolio Return is equal to or less than zero, the Cash
Settlement Value
for each Note will be $1,000. Because the Notes are principal
protected if
held to maturity, in no event will the Cash Settlement
Value for each Note
be less than $1,000.
|
|
|
·
|
The
Participation Rate is
[100.00]%.
|
|
BEAR,
STEARNS & CO. INC.
STRUCTURED
PRODUCTS GROUP
(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.
The
Notes will not be listed on any U.S. securities exchange
or quotation
system. Neither the Securities and Exchange Commission
nor any state
securities commission has approved or disapproved of
these securities or
determined that this free writing prospectus is truthful
or complete. Any
representation to the contrary is a criminal offense.
|
|
-1-
|
STRUCTURED
PRODUCTS
GROUP
|
|
GENERAL
TERMS
|
This
free
writing prospectus relates to a Note offering linked
to
the performance of an equally-weighted portfolio comprised of the following
five
equity indices: (1) the S&P 500®
Index
(the “SPX”); (2) the Dow Jones EURO STOXX 50®
Index
(the “SX5E”); (3) the Nikkei 225™ Stock Index (the “NKY”); (4) the AMEX Hong
Kong 30 Index (the “HKX”); and (5) the FTSE/Xinhua China 25 Index™ (the “XIN0I”)
(each such index a “Component” and together the “Portfolio”). The weighting of
each Component within the Portfolio is fixed at 1/5, or 20.00%, and will
not
change during the term of the Notes unless one or more Components is modified
during the term of the Notes. 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 Pricing
Supplement discussed below.
|
ISSUER:
|
The
Bear Stearns Companies Inc.
|
|
ISSUER’S
RATING:
|
A2
/ A (Moody’s / S&P)
|
|
CUSIP
NUMBER:
|
073928Z55
|
|
ISSUE
PRICE:
|
100.00%
of the Principal Amount ([99.00]% for investors who purchase
a Principal
Amount of at least $1,000,000).
|
|
PRINCIPAL
AMOUNT:
|
$[l]
|
|
DENOMINATIONS:
|
$1,000
per Note and $1,000 multiples thereafter
|
|
SELLING
PERIOD ENDS:
|
January
[l],
2008
|
|
SETTLEMENT
DATE:
|
January
[l],
2008
|
|
MATURITY
DATE:
|
August
[l],
2011 (for a term of approximately 42 months). The Maturity
Date is subject
to adjustment as described in the Pricing Supplement.
|
|
COMPONENTS:
|
The
Notes are linked to the performance of an equally-weighted
portfolio
comprised of the following five
equity indices: (1) the S&P 500®
Index (the “SPX”); (2) the Dow Jones EURO STOXX 50®
Index (the “SX5E”); (3) the Nikkei 225™ Stock Index (the “NKY”); (4) the
AMEX Hong Kong 30 Index (the “HKX”); and (5) the FTSE/Xinhua China 25
Index™ (the “XIN0I”) (each such index a “Component” and together the
“Portfolio”).
|
|
COMPONENT
SPONSORS:
|
Standard
& Poor’s, a division of The McGraw-Hill Companies, Inc. as the sponsor
of the SPX; STOXX Limited, a partnership of Deutsche Börse AG, Dow Jones
& Company and the SWX Group as the sponsor of the SX5E; Nihon
Keizai
Shimbun, Inc. as the sponsor of the NKY; American Stock Exchange
LLC as
the sponsor for the HKX; and FTSE/Xinhua Index Limited, a joint
venture of
FTSE International Limited and Xinhua Financial Network Limited
as the
sponsor of the XIN0I are hereinafter referred to as “Component
Sponsors.”
|
|
CASH
SETTLEMENT VALUE:
|
An
amount in cash that depends upon the Portfolio Return.
|
|
If the
Portfolio Return is greater than zero, the Cash Settlement
Value for each
Note will be equal to the principal amount of the Notes, plus:
the product
of (a) $1,000 multiplied by (b) the Portfolio Return multiplied
by (c) the
Participation Rate
|
|
|
If the
Portfolio Return is equal to or less than zero, the Cash Settlement
Value
for each Note will be equal to the principal amount of the
Note. Because
the Notes are principal protected if held to maturity, in no
event will
the Cash Settlement Value for each Note held to maturity be
less than
$1,000.
|
|
|
PORTFOLIO
RETURN:
|
An
amount determined by the Calculation Agent and equal to the
arithmetic
average of the Index Performance for each Component.
|
|
INDEX
PERFORMANCE:
|
Equals,
as of the Final Observation Date and with respect to a Component,
the
quotient, expressed as a percentage, of (i) the arithmetic
average of the
Observation Levels for that Component as of each Observation
Date minus
the Initial Component Level of that Component divided by (ii)
the Initial
Component Level of that Component.
|
|
INITIAL
COMPONENT LEVEL:
|
Equals
(i) [l]
with respect to the SPX; (ii) [l]
with respect to the SX5E; (iii) [l]
with respect to the NKY; (iv) [l]
with respect to the HKX; and (v) [l]
with respect to the XIN0I, each as determined by the Calculation
Agent as
of the Pricing Date.
|
|
BEAR,
STEARNS & CO.
INC.
|
-2-
|
STRUCTURED
PRODUCTS
GROUP
|
|
OBSERVATION
LEVEL:
|
Means,
as of any Observation Date and for each Component, the closing
index level
as reported by the relevant Component Sponsor and displayed
on Bloomberg
Page SPX <Index> <Go> with respect to the SPX, Bloomberg Page
SX5E <Index> <Go> with respect to the SX5E; Bloomberg Page NKY
<Index> <Go> with respect to the NKY; Bloomberg Page HKX
<Index> <Go> with respect to the HKX; and Bloomberg Page XIN0I
<Index> <Go> with respect to the XIN0I.
|
|
OBSERVATION
DATES:
|
July
[l],
2008, July [l],
2009, July [l],
2010, and July [l],
2011 (the “Final Observation Date”); the Observation Dates are subject to
adjustment as described in the Pricing Supplement.
|
|
ISSUE
DATE:
|
January
[l],
2008.
|
|
INTEREST:
|
The
Notes will not bear interest.
|
|
PARTICIPATION
RATE:
|
[100.00]%
|
|
PRICING
DATE:
|
January
[l],
2008
|
|
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 January 8, 2008 (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 January 8, 2008 (subject to completion):
|
|
·
|
Prospectus
Supplement dated August 16, 2006:
|
|
·
|
Prospectus
dated August 16, 2006:
|
|
ILLUSTRATIVE
EXAMPLES OF CASH SETTLEMENT
VALUE
|
The
following hypothetical examples are for illustrative purposes and
are not
indicative of the future performance of the Components, the Portfolio
or the
future value of the Notes. The following hypothetical examples demonstrate
the
hypothetical Cash Settlement Value of a Note based on the assumptions
outlined
below. The hypothetical examples do not purport to be representative
of every
possible scenario concerning increases or decreases in the Components
or the
Portfolio Value. You should not construe these examples as an indication
or
assurance of the expected performance of the Notes. Actual returns
may be
different. Numbers may be rounded for ease of use. The 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.
|
|
·
|
Investor
holds the Notes to maturity.
|
|
·
|
The
Initial Component Level for the SPX is equal to 1,425.00.
|
|
·
|
The
Initial Component Level for the SX5E is equal to 4,300.00.
|
|
·
|
The
Initial Component Level for the NKY is equal to
14,750.00.
|
|
·
|
The
Initial Component Level for the HKX is equal to
1,400.
|
|
·
|
The
Initial Component Level for the XIN0I is equal to
24,750.
|
|
·
|
The
Participation Rate is 100.00%.
|
|
·
|
All
returns are based on a 42-month 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
|
Example
1: The Portfolio Return is greater than zero.
In
this
example, the levels of all four Components increase relative to their
Initial
Component Levels on the related Observation Dates. This example illustrates
how
holders of the Notes would benefit from the increase in the Observation
Level of
each Component relative to its respective Initial Component Level
on each
related Observation Date.
|
|
SPX
|
SX5E
|
NKY
|
HKX
|
XIN0I
|
|
Initial
Component Level
|
1,425
|
4,300
|
14,750
|
1,400
|
24,750
|
|
July
2008 Observation Value
|
1,462
|
5,894
|
19,215
|
1,476
|
29,336
|
|
July
2009 Observation Value
|
1,528
|
6,648
|
22,808
|
1,696
|
32,627
|
|
July
2010 Observation Value
|
1,533
|
7,445
|
26,402
|
1,928
|
40,473
|
|
July
2011 Observation Value
|
1,404
|
7,164
|
27,320
|
2,280
|
41,915
|
|
Average
Observation Level
|
1,482
|
6,788
|
23,936
|
1,845
|
36,088
|
|
Average
Observation Level as % of Initial Component Level
|
103.98%
|
157.85%
|
162.28%
|
131.79%
|
145.81%
|
On
the
Final Observation Date, the Index Performance for SPX would be 3.98%,
the Index
Performance for SX5E would be 57.85%, the Index Performance for NKY
would be
62.28%, the Index Performance for HKX would be 31.79%, and the Index
Performance
for XIN0I would be 45.81%, each as calculated pursuant to the below
formula:
In
this
example, using the formula below, the Portfolio Return would be greater
than
zero.
Portfolio
Return
The
Cash
Settlement Value, using the formula below, would equal $1,403.45.
Cash
Settlement Value
Example
2: The Portfolio Return might be less than zero.
In
this
example, the Observation Levels of all four Components decrease relative
to
their Initial Component Levels on the related Observation Dates.
As a result,
the Portfolio Return would be less than zero, and holders of the
Notes would
therefore have received only the principal amount of each Note at
maturity.
|
BEAR,
STEARNS & CO.
INC.
|
-5-
|
STRUCTURED
PRODUCTS
GROUP
|
|
|
SPX
|
SX5E
|
NKY
|
HKX
|
XIN0I
|
|
Initial
Component Level
|
1,425
|
4,300
|
14,750
|
1,400
|
24,750
|
|
July
2008 Observation Value
|
1,419
|
3,651
|
13,948
|
1,250
|
23,213
|
|
July
2009 Observation Value
|
1,408
|
4,005
|
14,457
|
1,349
|
27,208
|
|
July
2010 Observation Value
|
1,196
|
3,868
|
11,035
|
1,067
|
20,382
|
|
July
2011 Observation Value
|
1,058
|
3,229
|
12,498
|
1,194
|
21,297
|
|
Average
Observation Level
|
1,270
|
3,688
|
12,985
|
1,215
|
23,025
|
|
Average
Observation Level as % of Initial Component Level
|
89.14%
|
85.77%
|
88.03%
|
86.79%
|
93.03%
|
On
the
Final Observation Date, the Index Performance for SPX would
be -10.86%, the
Index Performance for SX5E would be -14.23%, the Index Performance
for NKY would
be -11.97%, the Index Performance for HKX would be -13.21%,
and the Index
Performance for XIN0I would be -6.97%, each as calculated pursuant
to the below
formula:
In
this
example, using the formula below, the Portfolio Return would
be greater than
zero.
Portfolio
Return
Since
the
Portfolio Return would be less than zero, the Cash Settlement
Value for each
Note would be the principal amount of $1,000.
Example
3: Some Components move higher while others move lower.
In
this
example, the Observation Levels for some of the Components
increase relative to
the initial Component Levels for those Components, while the
Observation Levels
for other of the Components decrease relative to the Initial
Component Levels
for those Components.
|
|
SPX
|
SX5E
|
NKY
|
HKX
|
XIN0I
|
|
Initial
Component Level
|
1,425
|
4,300
|
14,750
|
1,400
|
24,750
|
|
July
2008 Observation Value
|
1,396
|
4,729
|
14,875
|
1,475
|
28,461
|
|
July
2009 Observation Value
|
1,344
|
3,856
|
16,575
|
1,399
|
32,495
|
|
July
2010 Observation Value
|
1,256
|
4,190
|
18,448
|
1,435
|
36,601
|
|
July
2011 Observation Value
|
1,175
|
3,721
|
15,247
|
1,430
|
46,883
|
|
Average
Observation Level
|
1,293
|
4,124
|
16,286
|
1,435
|
36,110
|
|
Average
Observation Level as % of Initial Component Level
|
90.72%
|
95.91%
|
110.42%
|
102.48%
|
145.90%
|
|
BEAR,
STEARNS & CO.
INC.
|
-6-
|
STRUCTURED
PRODUCTS
GROUP
|
On the Final Observation Date, the Index Performance for SPX would be -9.28%, the Index Performance for SX5E would be -4.09%, the Index Performance for NKY would be 10.42%, the Index Performance for HKX would be 2.48%, and the Index Performance for XIN0I would be 45.90%, each as calculated pursuant to the below formula:
In
this
example, using the formula below, the Portfolio Return would
be greater than
zero.
Portfolio
Return
The
Cash
Settlement Value, using the formula below, will equal $1,090.82.
Cash
Settlement Value
|
BEAR,
STEARNS & CO.
INC.
|
-7-
|
STRUCTURED
PRODUCTS
GROUP
|
Summary
of Illustrative Examples 1-3 Reflecting the Relevant Cash Settlement
Value
|
Example
1
|
Example
2
|
Example
3
|
|
|
Hypothetical
Initial Component Level for SPX
|
1,425
|
1,425
|
1,425
|
|
Hypothetical
average Observation Level for SPX
|
1,482
|
1,270
|
1,293
|
|
Hypothetical
Initial Component Level for SX5E
|
4,300
|
4,300
|
4,300
|
|
Hypothetical
average Observation Level for SX5E
|
6,788
|
3,688
|
4,124
|
|
Hypothetical
Initial Component Level for NKY
|
14,750
|
14,750
|
14,750
|
|
Hypothetical
average Observation Level for NKY
|
23,936
|
12,985
|
16,286
|
|
Hypothetical
Initial Component Level for HKX
|
1,400
|
1,400
|
1,400
|
|
Hypothetical
average Observation Level for HKX
|
1,845
|
1,215
|
1,435
|
|
Hypothetical
Initial Component Level for XIN0I
|
24,750
|
24,750
|
24,750
|
|
Hypothetical
average Observation Level for XIN0I
|
36,088
|
23,025
|
36,110
|
|
Portfolio
Return
|
Positive
|
Negative
|
Positive
|
|
Principal
protected?
|
Yes
|
Yes
|
Yes
|
|
Cash
Settlement Value per Note
|
$1,403.40
|
$1,000.00
|
$1,090.82
|
|
BEAR,
STEARNS & CO.
INC.
|
-8-
|
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.
|
|
·
|
No
current income—We
will not pay any interest on the Notes. The yield
on the Notes, therefore,
may be less than the overall return you would earn
if you purchased a
conventional debt security at the same time and
with the same Maturity
Date from an issuer with a comparable credit rating.
|
|
·
|
No
interest, dividend or other payments—You
will not receive any interest, dividend payments
or other distributions on
the stocks underlying the Components; nor will
such payments be included
in the calculation of the Cash Settlement Value
you will receive at
maturity.
|
|
·
|
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.
|
|
·
|
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.
|
|
·
|
The
Components may not move in tandem—At
a time when the level of one or more of the Components
increases, the
level of one or more of the other Components may
decline. Therefore, in
calculating the Portfolio Return, increases in
the level of one or more of
the Components may be moderated, or wholly offset,
by lesser increases or
declines in the level of one or more of the other
Components.
|
|
·
|
Taxes - For
U.S. federal income tax purposes, we intend to
treat the Notes as
contingent payment debt instruments. As a result,
you will be required to
include original issue discount (“OID”) in income during your ownership of
the Notes even though no cash payments will be
made with respect to the
Notes until maturity. Additionally, you will generally
be required to
recognize ordinary income on the gain, if any,
realized on a sale, upon
maturity, or other disposition of the Notes. You
should review the
discussion under the section entitled “Certain U.S. Federal Income Tax
Considerations” in the Pricing
Supplement..
|
|
BEAR,
STEARNS & CO.
INC.
|
-9-