Filed
Pursuant to Rule 433
Registration
No. 333−136666
February 1,
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.
Due:
March [l],
2009
INVESTMENT
HIGHLIGHTS
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12-month
term to maturity.
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The
Notes are fully principal protected if held to maturity and are
linked to
the Standard and Poor’s 500®
Index.
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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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Issue
Price: 100.00% of the Principal Amount of $1,000 per
Note.
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On
the Maturity Date, you will receive the “Cash Settlement Value,” which is
an amount in cash equal to the principal amount of each Note plus
a
“Variable Return”, where the Variable Return is calculated in the
following manner:
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·
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if,
at all times during the Observation Period, the Index Level is
observed
below the Upper Barrier and above the Lower Barrier, then the Variable
Return will equal the product of (i) the $1,000 principal amount
of the
Notes multiplied by (ii) the Participation Rate multiplied by (iii)
the
Index Return;
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however,
if at any time during the Observation Period the Index Level is
observed
at or above the Upper Barrier or at or below the Lower Barrier,
then the
Variable Return will be equal to zero.
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The
Index Return, on the Final Valuation Date, will equal the absolute
value
of the quotient of (i) the Final Index Level minus the Initial
Index Level
divided by (ii) the Initial Index Level.
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The
Participation Rate is [100.00]%.
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The
Upper Barrier is the Index Level that is [119.00-120.00]% of the
Initial
Index Level.
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The
Lower Barrier is the Index Level that is [80.00-81.00]% of the
Initial
Index Level.
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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.
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-1-
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STRUCTURED
PRODUCTS GROUP
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TERMS OF
OFFERING
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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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0739282E2
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ISSUE
PRICE:
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100.00%
of the Principal Amount
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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
[l],
2008
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SETTLEMENT
DATE:
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February
[l],
2008
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FINAL
VALUATION DATE:
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February
[l],
2009 unless such date is not an Index Business Day, in
which case the
Final Valuation 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.”
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MATURITY
DATE:
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The
Notes are expected to mature on March [l],
2009 unless such date is not a Business Day, in which
case the Maturity
Date shall be the next Business Day. If the Final Valuation
Date is
postponed, the Maturity Date will be three Business Days
following the
postponed Final Valuation Date.
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INDEX:
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Standard
& Poor’s 500®
Index (ticker “SPX”), as published by S&P (the
“Sponsor”).
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CASH
SETTLEMENT VALUE:
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On
the Maturity Date, you will receive the Cash Settlement
Value, which is an
amount in cash equal to the $1,000 principal amount of
each Note plus the
Variable Return.
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VARIABLE
RETURN:
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An
amount determined by the Calculation Agent and calculated
in the following
manner:
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(a)
if at all times during the Observation Period the Index
Level is observed
below the Upper Barrier and above the Lower Barrier,
then the Variable
Return will equal the product of (i) the $1,000 principal
amount of the
Notes multiplied by (ii) the Participation Rate multiplied
by (iii) the
Index Return,
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(b)
however, if at any time during the Observation Period
the Index Level is
observed at or above the Upper Barrier or at or below
the Lower Barrier,
then the Variable Return will be equal to zero.
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INDEX
RETURN:
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With
respect to the Final Valuation Date, the absolute value
of the quotient of
(i) the Final Index Level minus the Initial Index Level
divided by (ii)
the Initial Index Level.
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UPPER
BARRIER:
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The
Index Level that is [119.00-120.00]% of the Initial Index
Level.
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LOWER
BARRIER:
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The
Index Level that is [80.00-81.00]% of the Initial Index
Level.
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INDEX
LEVEL:
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As
of any time or date of determination during the Observation
Period, the
index level as reported by the Sponsor and displayed
on Bloomberg Page SPX
<Index> <GO>.
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OBSERVATION
PERIOD:
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Each
day which is an Index Business Day for the Index from
and including the
Pricing Date to and including the Final Valuation Date.
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INITIAL
INDEX LEVEL:
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[l],
the Index Level on the Pricing Date.
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FINAL
INDEX LEVEL:
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Will
be determined by the Calculation Agent and will equal
the closing Index
Level on the Final Valuation
Date.
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BEAR,
STEARNS & CO. INC.
-2-
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STRUCTURED
PRODUCTS GROUP
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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
[l],
2008.
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INDEX
BUSINESS DAY:
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With
respect to the Index, any day on which the Primary Exchange
(as defined
below) and each Related Exchange (as defined below) are scheduled
to be
open for trading.
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BUSINESS
DAY:
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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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PRIMARY
EXCHANGE:
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The
primary exchange or market of trading of any security then
included in the
Index.
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RELATED
EXCHANGE:
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Each
exchange or quotation system where trading has a material effect
(as
determined by the Calculation Agent) on the overall market
for futures or
options contracts relating to the Index.
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EXCHANGE
LISTING:
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The
Notes will not be listed on any securities exchange or quotation
system.
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CALCULATION
AGENT:
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Bear,
Stearns & Co. Inc.
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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 1, 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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Pricing
Supplement dated February 1, 2008 (subject to
completion):
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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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BEAR,
STEARNS & CO. INC.
-4-
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STRUCTURED
PRODUCTS GROUP
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ILLUSTRATIVE
EXAMPLES
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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 Index Level 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 Level during
the term of the Notes
or whether, at any
time during the Observation
Period, the Index
Level is observed
at or above the
Upper Barrier or
at or below the Lower
Barrier. 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.
You
can review the historical
levels of the Index
in the section of
the Pricing
Supplement called
“Description of the
Index.” The historical performance
of the
Index included in
the Pricing Supplement
should not be taken
as an indication
of
the future performance
of the Index. It
is impossible to
predict whether the
Final Index Level
will be greater than
or less than the
Initial Index Level
or
whether, at any time
during the Observation
Period, the Index
Level will be
observed above the
Upper Barrier or
below the Lower Barrier
during the term of
the Notes.
Assumptions:
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Investor
purchases
$1,000.00
aggregate
principal
amount
of Notes
at the
initial
public
offering
price of
$1,000.00.
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Investor
holds the
Notes to
maturity.
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The
Initial
Index Level
is equal
to
1,400.00.
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The
Lower Barrier
is 1,120.00
(representing
80.00%
of the
Initial
Index
Level).
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The
Upper Barrier
is 1,680.00
(representing
120.00%
of the
Initial
Index
Level).
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The
Participation
Rate is
100.00%.
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All
returns
are based
on a 12-month
term; pre-tax
basis.
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No
Market
Disruption
Events
occur during
the term
of the
Notes.
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Example
1
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Example
2
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Example
3
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Example
4
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Example
5
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Example
6
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Highest
Index Level
during
term of
Note
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1,652.00
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1,820.00
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1,652.00
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1,652.00
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2,100.00
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1,610.00
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Upper
Barrier
Breached
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No
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Yes
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No
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No
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Yes
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No
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Lowest
Index Level
during
term of
Note
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1,127.00
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1,127.00
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1,190.00
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980.00
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910.00
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1,148.00
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Lower
Barrier
Breached
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No
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No
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No
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Yes
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Yes
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No
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Final
Index Level
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1,134.00
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1,134.00
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1,638.00
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1,652.00
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2,100.00
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1,437.33
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Index
Return
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-19.00%
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-19.00%
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17.00%
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18.00%
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50.00%
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2.67%
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Variable
Return
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$190.00
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$0.00
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$170.00
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$0.00
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$0.00
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$26.67
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Cash
Settlement
Value per
Note
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$1,190.00
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$1,000.00
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$1,170.00
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$1,000.00
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$1,000.00
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$1,026.67
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Example
1:
In
this
example, the Index
Level, at all times
during the Observation
Period, is
observed below the
Upper Barrier and
above the Lower Barrier.
The Index Return,
as calculated below,
is 19.00%.
BEAR,
STEARNS
&
CO.
INC.
-5-
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STRUCTURED
PRODUCTS
GROUP
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Therefore,
the Cash Settlement
Value would equal
$1,190.00, or the
$1,000.00 principal
amount of the Notes
plus the Variable
Return of $190.00;
where the Variable
Return is as calculated
below:
Variable
Return = $1,000.00
x Participation Rate
x Index Return
Variable
Return = $1,000.00
x 100.00% x 19.00%
Variable
Return = $190.00
In
this
example, although
the Final Index Level
is lower than the
Initial Index Level,
your return on investment
will still be positive
(in this case, 19.00%),
because
(1) the Index Return
measures the absolute
value of the quotient
of (i) the
Final Index Level
minus the Initial
Index Level divided
by (ii) the Initial
Index Level, and
(2) at all times
during the Observation
Period, the Index
Level
was observed below
the Upper Barrier
and above the Lower
Barrier.
Example
2:
In
this
example, the Index
Level at some time
during the Observation
Period is observed
above the Upper Barrier.
Although the Final
Index Level in this
Example 2 is
equal to the Final
Index Level in Example
1, and therefore
the Index Return
for
this Example 2 would
also equal the Index
Return in Example
1, because the Index
Level at some time
during the Observation
Period was observed
above the Upper
Barrier the Variable
Return equals zero.
Therefore,
the Cash Settlement
Value would equal
the $1,000.00 principal
amount of the
Notes.
In
this
example, your return
on investment would
be 0.00%, because
at some time during
the Observation Period
the Index Level was
observed above the
Upper
Barrier.
Example
3:
In
this
example, the Index
Level, at all times
during the Observation
Period, is
observed below the
Upper Barrier and
above the Lower Barrier.
The Index Return,
as calculated below,
is 17.00%.
Therefore,
the Cash Settlement
Value would equal
$1,170.00, or the
$1,000.00 principal
amount of the Notes
plus the Variable
Return of $170.00;
where the Variable
Return is as calculated
below:
Variable
Return = $1,000.00
x Participation Rate
x Index Return
Variable
Return = $1,000.00
x 100.00% x 17.00%
Variable
Return = $170.00
In
this
example, your return
on investment will
be positive (in this
case, 17.00%),
because at all times
during the Observation
Period, the Index
Level was observed
below the Upper Barrier
and above the Lower
Barrier.
Example
4:
In
this
example, the Index
Level at some time
during the Observation
Period is observed
below the Lower Barrier.
Although the Final
Index Level is greater
than the
Initial Index Level,
because the Index
Level at some time
during the Observation
Period was observed
below the Lower Barrier
the Variable Return
equals
zero.
Therefore,
the Cash Settlement
Value would equal
the $1,000.00 principal
amount of the
Notes.
In
this
example, your return
on investment would
be 0.00%, because,
at some time during
the Observation Period
the Index Level was
observed below the
Lower
Barrier.
BEAR,
STEARNS
&
CO.
INC.
-6-
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STRUCTURED
PRODUCTS
GROUP
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Example
5:
In
this
example, the Index
Level at some time
during the Observation
Period is observed
above the Upper Barrier
and the Index Level,
at another time during
the
Observation Period,
is observed below
the Lower Barrier.
Although the Final
Index Level is greater
than the Initial
Index Level, because
the Index Level,
at
some time during
the Observation Period,
was observed above
the Upper Barrier
and the Index Level,
at another time during
the Observation Period,
was observed
below the Lower Barrier
the Variable Return
equals zero.
Therefore,
the Cash Settlement
Value would equal
the $1,000.00 principal
amount of the
Notes.
In
this
example, your return
on investment would
be 0.00%, because,
at some time during
the Observation Period,
the Index Level was
observed above the
Upper Barrier
and, at another time
during the Observation
Period, the Index
Level was observed
below the Lower Barrier
Example
6:
In
this
example, the Index
Level, at all times
during the Observation
Period, is
observed below the
Upper Barrier and
above the Lower Barrier.
The Index Return,
as calculated below,
is 2.67%.
Therefore,
the Cash Settlement
Value would equal
$1,026.67, or the
$1,000.00 principal
amount of the Notes
plus the Variable
Return of $26.67;
where the Variable
Return is as calculated
below:
Variable
Return = $1,000.00
x Participation Rate
x Index Return
Variable
Return = $1,000.00
x 100.00% x 2.67%
Variable
Return = $26.67
In
this
example, your return
on investment will
be positive (in this
case, 2.67%),
because at all times
during the Observation
Period, the Index
Level was observed
below the Upper Barrier
and above the Lower
Barrier.
BEAR,
STEARNS
&
CO.
INC.
-7-
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STRUCTURED
PRODUCTS
GROUP
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SELECTED
RISK
CONSIDERATIONS
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·
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Suitability
of the 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.
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Non-conventional
return - The
yield on the Notes 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.
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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. (“Bear Stearns”) 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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·
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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.
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BEAR,
STEARNS & CO. INC.
-8-