Free
Writing Prospectus
Filed
Pursuant to Rule 433
Registration
No. 333−136666
February 4,
2008
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STRUCTURED
EQUITY PRODUCTS
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New
Issue
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Indicative
Terms
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THE
BEAR STEARNS COMPANIES INC.
Medium-Term
Notes
Linked
to a Portfolio of Indices
Due:
February [29],
2012
INVESTMENT
HIGHLIGHTS
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·
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4
year term to maturity.
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·
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The
Notes are 100% principal protected if held to maturity.
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·
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Issue
is a direct obligation of The Bear Stearns Companies Inc. (Rated
A2 by
Moody’s / A by S&P).
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·
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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).
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·
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The
Notes are linked to the potential positive performance of an
equally-weighted portfolio comprised of the following four 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”); and (4)
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 1/4, or 25.00%, and will not
change
during the term of the Notes unless one or more Components is
modified
during the term of the Notes.
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·
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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 four 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.
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·
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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.
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·
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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.
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·
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The
Participation Rate is
[100.00]%.
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BEAR, STEARNS & CO. INC.
STRUCTURED
PRODUCTS GROUP
(212) 272-6928
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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.
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1
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STRUCTURED
PRODUCTS GROUP
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GENERAL
TERMS
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This
free
writing prospectus relates to a Note offering linked
to
the performance of an equally-weighted portfolio comprised of the following
four
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”); and (4) 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 1/4, or 25.00%, 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.
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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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A2
/ A (Moody’s / S&P)
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CUSIP
NUMBER:
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0739282C6
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ISSUE
PRICE:
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100.00%
of the Principal Amount (99.00% for investors who purchase
a Principal
Amount of at least $1,000,000).
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PRINCIPAL
AMOUNT:
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$[l]
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DENOMINATIONS:
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$1,000
per Note and $1,000 multiples thereafter
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SELLING
PERIOD ENDS:
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February
[26], 2008
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SETTLEMENT
DATE:
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February
[29], 2008
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MATURITY
DATE:
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February
[29], 2012 (for a term of approximately 48 months). The Maturity
Date is
subject to adjustment as described in the Pricing
Supplement.
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COMPONENTS:
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The
Notes are linked to the performance of an equally-weighted
portfolio
comprised of the following four
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”); and (4)
the FTSE/Xinhua China 25 Index™ (the “XIN0I”) (each such index a
“Component” and together the “Portfolio”).
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COMPONENT
SPONSORS:
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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; 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.”
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CASH
SETTLEMENT VALUE:
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An
amount in cash that depends upon the Portfolio Return.
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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
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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.
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PORTFOLIO
RETURN:
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An
amount determined by the Calculation Agent and equal to the
arithmetic
average of the Index Performance for each Component.
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INDEX
PERFORMANCE:
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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.
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INITIAL
COMPONENT LEVEL:
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Equals
(i) [l]
with respect to the SPX; (ii) [l]
with respect to the SX5E; (iii) [l]
with respect to the NKY; and (iv) [l]
with respect to the XIN0I, each as determined by the Calculation
Agent as
of the Pricing Date.
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BEAR,
STEARNS & CO. INC.
2
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STRUCTURED
PRODUCTS GROUP
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OBSERVATION
LEVEL:
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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; and Bloomberg Page XIN0I
<Index> <Go> with respect to the XIN0I.
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OBSERVATION
DATES:
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February
[26], 2009, February [26], 2010, February [28], 2011, and February
[27],
2012 (the “Final Observation Date”); the Observation Dates are subject to
adjustment as described in the Pricing Supplement.
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ISSUE
DATE:
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February
[29], 2008.
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INTEREST:
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The
Notes will not bear interest.
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PARTICIPATION
RATE:
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[100.00]%
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PRICING
DATE:
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February
[27], 2008
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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
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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 February 4, 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:
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·
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Pricing
Supplement dated February 4, 2008 (subject to
completion):
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·
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Prospectus
Supplement dated August 16, 2006:
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·
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Prospectus
dated August 16, 2006:
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ILLUSTRATIVE
EXAMPLES OF CASH SETTLEMENT
VALUE
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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:
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·
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Investor
purchases
$1,000
aggregate
principal
amount
of Notes
at the
initial
public
offering
price
of $1,000.
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·
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Investor
holds
the Notes
to maturity.
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The
Initial
Component
Level
for the
SPX is
equal
to 1,425.
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The
Initial
Component
Level
for the
SX5E
is equal
to 4,300.
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The
Initial
Component
Level
for the
NKY is
equal
to
14,750.
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The
Initial
Component
Level
for the
XIN0I
is equal
to
24,750.
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The
Participation
Rate
is 100.00%.
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All
returns
are based
on a
48-month
term,
pre-tax
basis.
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·
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No
Market
Disruption
Events
or Events
of Default
occur
during
the term
of the
Notes.
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BEAR,
STEARNS & CO. INC.
4
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STRUCTURED
PRODUCTS
GROUP
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Example
1: The Portfolio
Return is greater
than zero.
In
this
example, the
average Observation
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.
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SPX
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SX5E
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NKY
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XIN0I
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Initial
Component
Level
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1,425
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4,300
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14,750
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24,750
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February
2009
Observation
Value
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1,806
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4,396
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13,925
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37,088
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February
2010
Observation
Value
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1,915
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4,807
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15,472
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50,899
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February
2011
Observation
Value
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2,177
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5,384
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19,458
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60,416
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February
2012
Observation
Value
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2,273
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5,606
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23,492
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77,155
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Average
Observation
Level
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2,043
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5,048
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18,087
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56,390
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Index
Performance
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43.35%
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17.40%
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22.62%
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127.84%
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On
the
Final Observation
Date, the Index
Performance for
the SPX would
be 43.35%, the
Index Performance
for the SX5E
would be 17.40%,
the Index Performance
for the
NKY would be
22.62%, and the
Index Performance
for the XIN0I
would be 127.84%,
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 $1,528.03.
Cash
Settlement Value
BEAR,
STEARNS & CO. INC.
5
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STRUCTURED
PRODUCTS
GROUP
|
Example
2: The Portfolio
Return might
be less than
zero.
In
this
example, the
average 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.
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SPX
|
SX5E
|
NKY
|
XIN0I
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Initial
Component
Level
|
1,425
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4,300
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14,750
|
24,750
|
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February
2009
Observation
Value
|
1,410
|
3,393
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15,806
|
15,789
|
|
February
2010
Observation
Value
|
1,379
|
2,747
|
13,348
|
11,955
|
|
February
2011
Observation
Value
|
1,255
|
2,317
|
14,210
|
11,291
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February
2012
Observation
Value
|
1,308
|
1,954
|
14,817
|
9,809
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Average
Observation
Level
|
1,338
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2,603
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14,545
|
12,211
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Index
Performance
|
-6.11%
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-39.47%
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-1.39%
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-50.66%
|
On
the
Final Observation
Date, the Index
Performance for
the SPX would
be -6.11%, the
Index Performance
for the SX5E
would be -39.47%,
the Index Performance
for the
NKY would be
-1.39%, and the
Index Performance
for the XIN0I
would be -50.66%,
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.
BEAR,
STEARNS
& CO. INC.
6
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STRUCTURED
PRODUCTS
GROUP
|
Example
3: Some Components
move higher while
others move lower.
In
this
example, the
average Observation
Levels for some
of the Components
increase
relative to the
Initial Component
Levels for those
Components, while
the average
Observation Levels
for other of
the Components
decrease relative
to the Initial
Component Levels
for those Components.
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SPX
|
SX5E
|
NKY
|
XIN0I
|
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Initial
Component
Level
|
1,425
|
4,300
|
14,750
|
24,750
|
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February
2009
Observation
Value
|
1,323
|
4,396
|
14,549
|
30,553
|
|
February
2010
Observation
Value
|
1,008
|
4,807
|
12,860
|
39,052
|
|
February
2011
Observation
Value
|
990
|
5,384
|
12,981
|
40,127
|
|
February
2012
Observation
Value
|
990
|
5,606
|
11,884
|
31,534
|
|
Average
Observation
Level
|
1,078
|
5,048
|
13,069
|
35,317
|
|
Index
Performance
|
-24.37%
|
17.40%
|
-11.40%
|
42.69%
|
On
the
Final Observation
Date, the Index
Performance for
the SPX would
be -24.37%, the
Index Performance
for the SX5E
would be 17.40%,
the Index Performance
for the
NKY would be
-11.40%, and
the Index Performance
for the XIN0I
would be 42.69%,
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
$1,060.80.
Cash
Settlement Value
BEAR,
STEARNS & CO. INC.
7
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STRUCTURED
PRODUCTS
GROUP
|
Summary
of Illustrative
Examples 1-3
Reflecting the
Relevant Cash
Settlement
Value
|
Example
1
|
Example
2
|
Example
3
|
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|
Hypothetical
Initial
Component
Level
for
SPX
|
1,425
|
1,425
|
1,425
|
|
Hypothetical
average
Observation
Level
for
SPX
|
2,043
|
1,338
|
1,078
|
|
Hypothetical
Initial
Component
Level
for
SX5E
|
4,300
|
4,300
|
4,300
|
|
Hypothetical
average
Observation
Level
for
SX5E
|
5,048
|
2,603
|
5,048
|
|
Hypothetical
Initial
Component
Level
for
NKY
|
14,750
|
14,750
|
14,750
|
|
Hypothetical
average
Observation
Level
for
NKY
|
18,087
|
14,545
|
13,069
|
|
Hypothetical
Initial
Component
Level
for
XIN0I
|
24,750
|
24,750
|
24,750
|
|
Hypothetical
average
Observation
Level
for
XIN0I
|
56,390
|
12,211
|
35,317
|
|
Portfolio
Return
|
Positive
|
Negative
|
Positive
|
|
Principal
protected?
|
Yes
|
Yes
|
Yes
|
|
Cash
Settlement
Value
per
Note
|
$1,528.03
|
$1,000.00
|
$1,060.80
|
BEAR,
STEARNS & CO. INC.
8
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|
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