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Filed
Pursuant to Rule 433
Registration
No. 333−136666
March
5, 2008
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 |
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STRUCTURED
EQUITY
PRODUCTS
|
|
New
Issue
|
Indicative
Terms
|
|
 |
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THE
BEAR STEARNS COMPANIES INC.
|
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|
Note
Linked to the Financial Select Sector SPDR®
Fund
Due:
April [l],
2009
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INVESTMENT
HIGHLIGHTS
|
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|
·
|
13
month term to maturity.
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|
·
|
The
Notes are linked to the performance of the Financial Select
Sector
SPDR®
Fund and are
not principal protected.
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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 (99.00% for investors
who purchase
at least $1,000,000 of the Notes).
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|
|
·
|
If
the ETF 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) $1,000.00 multiplied by (b) the Upside Participation
Rate (200.00%)
multiplied by (c) the ETF Return; provided that in no event
will the Cash
Settlement Value payable at maturity exceed $[1,250.00-1,280.00]
per Note,
which represents a maximum return of [25.00-28.00]% on the
Notes.
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·
|
If
ETF Return is less than or equal to zero but greater than
or equal to
-10.00%, the Cash Settlement Value will be equal to the $1,000.00
principal amount of the Note.
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|
|
·
|
If
the ETF Return is less than -10.00%, then the Cash Settlement
Value for
each Note will be equal to the $1,000.00 principal amount
minus 1.00% of
the $1,000.00 principal amount for each percentage point
that the ETF
Return is less than -10.00%. For example, if the ETF Return
is -30.00%,
you will suffer a 20.00% loss and, therefore, the Cash Settlement
Value of
each Note will be equal to 80.00% of the principal
amount.
|
|
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.
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|
-1-
|
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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0739282U6
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ISSUE
PRICE:
|
100.00%
of the Principal Amount (99.00% for investors who purchase at
least
$1,000,000 of the Notes).
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AGGREGATE
PRINCIPAL AMOUNT:
|
$[l].
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DENOMINATIONS:
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$1,000.00
per Note and $1,000.00 multiples thereafter.
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SELLING
PERIOD ENDS:
|
March
[l],
2008.
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SETTLEMENT
DATE:
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March
[l],
2008.
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CALCULATION
DATE:
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April
[l],
2009, unless such date is not an ETF Business Day, in which case
the
Calculation Date shall be the next ETF 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:
|
The
Notes are expected to mature on April [l],
2009, unless such date is not a 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.
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CASH
SETTLEMENT VALUE:
|
On
the Maturity Date, you will receive the Cash Settlement Value,
an amount
in cash that depends upon the ETF Return. The Cash Settlement
Value, per
Note, will be calculated as follows:
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|
(a) If
the ETF 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
(i) $1,000.00 multiplied by (ii) the Upside Participation Rate
(200.00%)
multiplied by (iii) the ETF Return; provided that in no event
will the
Cash Settlement Value payable at maturity exceed $[1,250.00-1,280.00]
per
Note, which represents a maximum return of [25.00-28.00]% on
the
Notes.
|
|
|
(b) If
the ETF Return is less than or equal to zero but greater than
or equal to
-10.00%, the Cash Settlement Value will be equal to the $1,000.00
principal amount of the Note.
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|
(c) If
the ETF Return is less than -10.00%, then the Cash Settlement
Value for
each Note will be equal to the $1,000.00 principal amount minus
1.00% of
the $1,000.00 principal amount for each percentage point that
the ETF
Return is less than -10.00%. For example, if the ETF Return is
-30.00%,
you will suffer a 20.00% loss and, therefore, the Cash Settlement
Value of
each Note will be equal to 80.00% of the principal
amount.
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ETF
RETURN:
|
Equals
the quotient of (a) the Final Price minus the Initial Price,
divided by
(b) the Initial Price.
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UPSIDE
PARTICIPATION RATE:
|
200.00%.
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INITIAL
PRICE:
|
Equals
[l],
the closing share price of the ETF on March [l],
2008, as determined by the Calculation Agent.
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FINAL
PRICE:
|
The
Final Price will be determined by the Calculation Agent and will
equal the
closing share price of the ETF on the Calculation Date as determined
by
the Calculation Agent.
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EXCHANGE
LISTING:
|
The
Notes will not be listed on any securities exchange or quotation
system.
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BEAR,
STEARNS & CO.
INC.
|
-2-
|
Structured
Products
Group
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ETF
BUSINESS DAY:
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Means
any day on which the Relevant Exchange (as defined in the Pricing
Supplement) and each Related Exchange (as defined in the Pricing
Supplement) 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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CALCULATION
AGENT:
|
Bear,
Stearns & Co. Inc.
|
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ETF:
|
Financial
Select Sector SPDR®
Fund, an exchange traded fund issued by the Select Sector SPDR
Trust,
managed and maintained by SSgA Funds Management, Inc., and
traded on the
American Stock Exchange, LLC under the ticker symbol
“XLF”.
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|
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 March 5, 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 March 5, 2008 (subject to
completion):
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|
·
|
Prospectus
Supplement dated August 16, 2006:
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·
|
Prospectus
dated August 16, 2006:
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|
ILLUSTRATIVE
HYPOTHETICAL CASH SETTLEMENT VALUE
TABLE
|
The
following tables are for illustrative purposes and are not indicative
of the
future performance of the ETF or the future value of the Notes.
Because
the share price of the ETF 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 ETF during the term of the
Notes. You
should not construe these examples or the data included in any table
below as an
indication or assurance of the expected performance of the Notes.
Numbers used
in these examples may be rounded for ease of use.
You
can
review the historical share price of the ETF in the section of the
Pricing
Supplement called “Description of the ETF.” The historical performance of the
ETF included in the Pricing Supplement should not be taken as an
indication of
the future performance of the ETF during the term of the Notes. It
is impossible
to predict whether the Final Price will be greater than or less than
the Initial
Price.
The
examples demonstrating the hypothetical Cash Settlement Value of
a Note are
based on the following 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 Price is equal to 26.00.
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|
·
|
The
maximum return on the Notes is 27.00%, or $1,270.00 per
Note.
|
|
·
|
The
Upside Participation Rate is
200.00%.
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|
·
|
All
returns are based on a 13-month term; pre-tax
basis.
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|
·
|
No
Market Disruption Events occur during the term of the
Notes.
|
Example
1: The ETF Return is positive and the Cash Settlement Value is capped
at
$1,270.00.
In
this
example, the ETF rises over the term of the Notes. On the Calculation
Date, the
Final Price is 36.40, representing an ETF Return of 40.00%, as calculated
below:
|
BEAR,
STEARNS & CO.
INC.
|
-4-
|
STRUCTURED
PRODUCTS
GROUP
|
Because
the ETF Return is positive, the Cash Settlement Value will be equal
to the
$1,000.00 principal amount of the Notes plus the product of (i)
$1,000.00
multiplied by (ii) the Upside Participation Rate (200.00%) multiplied
by (iii)
the ETF Return; subject to the maximum return on the Notes of 27.00%.
In this
example, since the ETF Return multiplied by Upside Participation
Rate is greater
than 27.00%, the Cash Settlement Value on the Maturity Date would
be capped at
$1,270.00, which provides the maximum return on the Notes of 27.00%.
This
example illustrates the fact that the return on your Notes will
be limited to
the maximum return on the Notes of 27.00%.
Example
2: The ETF Return is positive and the Cash Settlement Value is
not subject to
the maximum return.
In
this
example, the ETF rises over the term of the Notes. On the Calculation
Date, the
Final Price is 28.60, representing an ETF Return of 10.00%, as
calculated below.
Because
the ETF Return is equal to 10.00% (which, after being multiplied
by the Upside
Participation Rate, is less than the maximum return of 27.00%),
the Cash
Settlement Value would be $1,200.00, as calculated below.
=
$1,000.00 + ($1,000.00 x Upside Participation Rate x ETF Return)
=
$1,000.00 + ($1,000.00 x 200.00% x 10.00%)
=
$1,000.00 + $200.00
=
$1,200.00
In
this
example, the share price of the ETF rises 10.00% over the term
of the Notes.
However, you would benefit from the Upside Participation Rate and
your return on
investment would be 20.00%.
Example
3: The ETF Return is negative, but is greater than -10.00%.
In
this
example, the ETF declines over the term of the Notes. On the Calculation
Date,
the Final Price is 23.92, representing an ETF Return of -8.00%,
as calculated
below.
Since
the
ETF Return is negative but is greater than -10.00%, the Cash Settlement
Value
would equal the $1,000.00 principal amount of the Note.
In
this
example, the share price of the ETF decreases 8.00% over the term
of the Notes,
and your return on investment would be 0.00%.
Example
4: The ETF Return is negative and is less than -10.00%.
In
this
example, the ETF declines over the term of the Notes. On the Calculation
Date,
the Final Price is 18.20, representing an ETF Return of -30.00%,
as calculated
below:
In
this
example, since the ETF Return is less than -10.00%, the Cash Settlement
Value
for each Note is equal to the $1,000.00 principal amount minus
1.00% of the
$1,000.00 principal amount for each percentage point that the ETF
Return is less
than -10.00%. In this example, the ETF Return is -30.00%. Therefore,
you will
suffer a 20.00% loss and receive 80.00% of the principal amount
of your Notes at
maturity, and the Cash Settlement Value for each note would be
$800.00. This
example demonstrates that if the ETF Return is less than -10.00%,
you will lose
some (as much as 90.00%) of your initial investment in the Notes.
|
BEAR,
STEARNS & CO.
INC.
|
-5-
|
STRUCTURED
PRODUCTS
GROUP
|
Summary
of Examples 1 Through 4
Reflecting
the Cash Settlement Value
|
Example
1
|
Example
2
|
Example
3
|
Example
4
|
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|
Initial
Price
|
26.00
|
26.00
|
26.00
|
26.00
|
||||
|
Hypothetical
Final Price
|
36.40
|
28.60
|
23.92
|
18.20
|
||||
|
Value
of hypothetical Final Price relative to the Initial Price
|
Higher
|
Higher
|
Lower
|
Lower
|
||||
|
Principal
fully repaid?
|
Yes
|
Yes
|
Yes
|
No
|
||||
|
Cash
Settlement Value per Note
|
$1,270.00
|
$1,200.00
|
$1,000.00
|
$800.00
|
Table
of Hypothetical Cash Settlement Values
|
Initial
Price
|
Final
Price
|
ETF
Return
|
Cash
Settlement
Value
Per
Note
|
Return
if
Held
to
Maturity
|
Initial
Price
|
Final
Price
|
ETF
Return
|
Cash
Settlement
Value
Per
Note
|
Return
if
Held
to
Maturity
|
|
|
26.00
|
33.28
|
+28.00%
|
$1,270.00
|
27.00%
|
26.00
|
25.74
|
-1.00%
|
$1000.00
|
0.00%
|
|
|
26.00
|
33.02
|
+27.00%
|
$1,270.00
|
27.00%
|
26.00
|
25.48
|
-2.00%
|
$1000.00
|
0.00%
|
|
|
26.00
|
32.76
|
+26.00%
|
$1,270.00
|
27.00%
|
26.00
|
25.22
|
-3.00%
|
$1000.00
|
0.00%
|
|
|
26.00
|
32.50
|
+25.00%
|
$1,270.00
|
27.00%
|
26.00
|
24.96
|
-4.00%
|
$1000.00
|
0.00%
|
|
|
26.00
|
32.24
|
+24.00%
|
$1,270.00
|
27.00%
|
26.00
|
24.70
|
-5.00%
|
$1000.00
|
0.00%
|
|
|
26.00
|
31.98
|
+23.00%
|
$1,270.00
|
27.00%
|
26.00
|
24.44
|
-6.00%
|
$1000.00
|
0.00%
|
|
|
26.00
|
31.72
|
+22.00%
|
$1,270.00
|
27.00%
|
26.00
|
24.18
|
-7.00%
|
$1000.00
|
0.00%
|
|
|
26.00
|
31.46
|
+21.00%
|
$1,270.00
|
27.00%
|
26.00
|
23.92
|
-8.00%
|
$1000.00
|
0.00%
|
|
|
26.00
|
31.20
|
+20.00%
|
$1,270.00
|
27.00%
|
26.00
|
23.66
|
-9.00%
|
$1000.00
|
0.00%
|
|
|
26.00
|
30.94
|
+19.00%
|
$1,270.00
|
27.00%
|
26.00
|
23.40
|
-10.00%
|
$1000.00
|
0.00%
|
|
|
26.00
|
30.68
|
+18.00%
|
$1,270.00
|
27.00%
|
26.00
|
23.14
|
-11.00%
|
$990.00
|
-1.00%
|
|
|
26.00
|
30.42
|
+17.00%
|
$1,270.00
|
27.00%
|
26.00
|
22.88
|
-12.00%
|
$980.00
|
-2.00%
|
|
|
26.00
|
30.16
|
+16.00%
|
$1,270.00
|
27.00%
|
26.00
|
22.62
|
-13.00%
|
$970.00
|
-3.00%
|
|
|
26.00
|
29.90
|
+15.00%
|
$1,270.00
|
27.00%
|
26.00
|
22.36
|
-14.00%
|
$960.00
|
-4.00%
|
|
|
26.00
|
29.64
|
+14.00%
|
$1,270.00
|
27.00%
|
26.00
|
22.10
|
-15.00%
|
$950.00
|
-5.00%
|
|
|
26.00
|
29.38
|
+13.00%
|
$1,260.00
|
26.00%
|
26.00
|
21.84
|
-16.00%
|
$940.00
|
-6.00%
|
|
|
26.00
|
29.12
|
+12.00%
|
$1,240.00
|
24.00%
|
26.00
|
21.58
|
-17.00%
|
$930.00
|
-7.00%
|
|
|
26.00
|
28.86
|
+11.00%
|
$1,220.00
|
22.00%
|
26.00
|
21.32
|
-18.00%
|
$920.00
|
-8.00%
|
|
|
26.00
|
28.60
|
+10.00%
|
$1,200.00
|
20.00%
|
26.00
|
21.06
|
-19.00%
|
$910.00
|
-9.00%
|
|
|
26.00
|
28.34
|
+9.00%
|
$1,180.00
|
18.00%
|
26.00
|
20.80
|
-20.00%
|
$900.00
|
-10.00%
|
|
|
26.00
|
28.08
|
+8.00%
|
$1,160.00
|
16.00%
|
26.00
|
20.54
|
-21.00%
|
$890.00
|
-11.00%
|
|
|
26.00
|
27.82
|
+7.00%
|
$1,140.00
|
14.00%
|
26.00
|
20.28
|
-22.00%
|
$880.00
|
-12.00%
|
|
|
26.00
|
27.56
|
+6.00%
|
$1,120.00
|
12.00%
|
26.00
|
20.02
|
-23.00%
|
$870.00
|
-1300%
|
|
|
26.00
|
27.30
|
+5.00%
|
$1,100.00
|
10.00%
|
26.00
|
19.76
|
-24.00%
|
$860.00
|
-14.00%
|
|
|
26.00
|
27.04
|
+4.00%
|
$1,080.00
|
8.00%
|
26.00
|
19.50
|
-25.00%
|
$850.00
|
-15.00%
|
|
|
26.00
|
26.78
|
+3.00%
|
$1,060.00
|
6.00%
|
26.00
|
19.24
|
-26.00%
|
$840.00
|
-16.00%
|
|
|
26.00
|
26.52
|
+2.00%
|
$1,040.00
|
4.00%
|
26.00
|
18.98
|
-27.00%
|
$830.00
|
-17.00%
|
|
|
26.00
|
26.26
|
+1.00%
|
$1,020.00
|
2.00%
|
26.00
|
18.72
|
-28.00%
|
$820.00
|
-18.00%
|
|
|
26.00
|
26.00
|
0.00%
|
$1,000.00
|
0.00%
|
26.00
|
18.46
|
-29.00%
|
$810.00
|
-19.00%
|
|
BEAR,
STEARNS & CO.
INC.
|
-6-
|
STRUCTURED
PRODUCTS
GROUP
|
|
SELECTED
RISK CONSIDERATIONS
|
|
·
|
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.
|
|
·
|
Possible
loss of principal —
The
Notes are not principal protected. If, on the Maturity
Date, the ETF
Return is less than -10.00%, there will be no principal
protection on the
Notes and the Cash Settlement Value you will receive
will be less than
your initial investment in the Notes.
|
|
·
|
Maximum
return of [25.00-28.00]% —
You will not receive more than the maximum return
of [25.00-28.00]% at
maturity, regardless of the positive percentage increase
of the Final
Price over the Initial Price. Because the maximum
return on the Notes is
[25.00-28.00]%, the maximum Cash Settlement Value
is
$[1,250.00-1,280.00].
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No
interest, dividend or other payments —
You will not receive any interest, dividend payments
or other
distributions on the Underlying Stocks (as defined
in the Pricing
Supplement) or the ETF.
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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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Concentration
—
Because the Notes are linked to XLF, a fund that
invests in the financial
sector of the S&P 500®
Index. As a result, an investment in the Notes will
be concentrated in
this single sector.
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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 share price of
the ETF 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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