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Free
Writing Prospectus
Filed
Pursuant to Rule 433
Registration
No. 333−136666
March 4, 2008 STRUCTURED
EQUITY
PRODUCTS
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New
Issue
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Indicative
Terms
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THE
BEAR STEARNS COMPANIES INC.
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Medium-Term
Notes
Linked
to a Portfolio of Indices
Due:
October
[1], 2013
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INVESTMENT
HIGHLIGHTS
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5.5
year term to maturity.
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The
Notes are 100% principal protected if held to maturity.
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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 ($1,000 per Note) ([99.00]%
for
investors who purchase a principal amount of at least
$1,000,000).
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The
Notes are linked to the potential positive performance of an
equally-weighted portfolio comprised of the following three
equity
indices: (1) the S&P 500®
Index (the “SPX”); (2) the Dow Jones EURO STOXX 50®
Index (the “SX5E”); and (3) the Nikkei 225™ Stock Index (the “NKY”) (each
such index a “Component” and together the “Portfolio”). The weighting of
each Component within the Portfolio is fixed at 1/3 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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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 three Index Performances, where “Index Performance” means, as of the
Calculation Date and with respect to a Component, the quotient,
expressed
as a percentage, of (i) the Final Component Level for that
Component minus
its Initial Component Level divided by (ii) its Initial Component
Level.
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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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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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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
three equity indices: (1) the S&P 500®
Index
(the “SPX”); (2) the Dow Jones EURO STOXX 50®
Index
(the “SX5E”); and (3) the Nikkei 225™ Stock Index (the “NKY”) (each such index a
“Component” and together the “Portfolio”). The weighting of each Component
within the Portfolio is fixed at 1/3 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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0739282Y8
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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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March
[l],
2008
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SETTLEMENT
DATE:
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March
[l],
2008
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MATURITY
DATE:
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October
[1], 2013 (for a term of approximately 66 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 three
equity indices: (1) the SPX; (2) the SX5E; and (3) the
NKY (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; and
Nihon
Keizai Shimbun, Inc. as the sponsor of the NKY 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 Calculation Date and with respect to a Component,
the quotient,
expressed as a percentage, of (i) the Final Component Level
for that
Component minus its Initial Component Level divided by
(ii) its Initial
Component Level.
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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; and (iii) [l]
with respect to the NKY, each as determined by the Calculation
Agent as of
the Pricing Date.
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FINAL
COMPONENT LEVEL:
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Means,
as of the Calculation Date and for each Component, the
closing index level
as reported by the relevant Component Sponsor and displayed
on the
Bloomberg Professional®
service (“Bloomberg”) Page Page SPX <Index> <Go> with respect
to the SPX, Bloomberg Page SX5E <Index> <Go> with respect to
the SX5E; and Bloomberg Page NKY <Index> <Go> with respect to
the NKY.
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BEAR,
STEARNS & CO.
INC.
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2
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STRUCTURED
PRODUCTS
GROUP
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CALCULATION
DATE:
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September
[l],
2013; the Calculation Date is subject to adjustment as described
in the
Pricing Supplement.
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ISSUE
DATE:
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March
[l],
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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March
[l],
2008
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BEAR,
STEARNS & CO.
INC.
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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 March 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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Pricing
Supplement dated March
4, 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
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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Investor
purchases $1,000 aggregate principal amount
of Notes at the initial public
offering price of $1,000.
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Investor
holds the Notes to maturity.
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The
Initial Component Level for the SPX is equal
to 1,400.
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The
Initial Component Level for the SX5E is equal
to 3,900.
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The
Initial Component Level for the NKY is equal
to
13,750.
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The
Participation Rate is 100.00%.
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All
returns are based on a 66-month term, pre-tax
basis.
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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.
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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 Index Performance of each Component is positive.
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SPX
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SX5E
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NKY
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Initial
Component Level
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1,400
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3,900
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13,750
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Final
Component Level
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1,950
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6,400
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22,500
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Index
Performance
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39.29%
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64.10%
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63.64%
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On
the
Calculation Date, the Index Performance for the SPX would be
39.29%, the Index
Performance for the SX5E would be 64.10%, and the Index Performance
for the NKY
would be 63.64%, 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 $1,556,77.
Cash
Settlement Value
Example
2: The Portfolio Return might be less than zero.
In
this
example, the Index Performance of each Component is negative.
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SPX
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SX5E
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NKY
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Initial
Component Level
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1,400
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3,900
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13,750
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Final
Component Level
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1,000
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3,000
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9,000
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Index
Performance
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-28.57%
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-23.08%
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-34.55%
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On
the
Calculation Date, the Index Performance for the SPX would be
-28.57%, the Index
Performance for the SX5E would be -23.08%, and the Index Performance
for the NKY
would be -34.55%, each as calculated pursuant to the below
formula:
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BEAR,
STEARNS & CO.
INC.
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5
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STRUCTURED
PRODUCTS
GROUP
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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, two Components have a positive Index Performance,
while the other
Component has a negative Index Performance.
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SPX
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SX5E
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NKY
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Initial
Component Level
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1,400
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3,900
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13,750
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Final
Component Level
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1,950
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4,650
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10,000
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Index
Performance
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39.29%
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19.23%
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-27.27%
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On
the
Calculation Date, the Index Performance for the SPX would be
39.29%, the Index
Performance for the SX5E would be 19.23%, and the Index Performance
for the NKY
would be -27.27%, 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 $1,104.16.
Cash
Settlement Value
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BEAR,
STEARNS & CO.
INC.
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6
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STRUCTURED
PRODUCTS
GROUP
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Summary
of Illustrative Examples 1-3 Reflecting the Relevant Cash Settlement
Value
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Example
1
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Example
2
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Example
3
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Hypothetical
Initial Component Level for SPX
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1,400
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1,400
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1,400
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Hypothetical
Final Component Level for SPX
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1,950
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1,000
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1,950
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Hypothetical
Initial Component Level for SX5E
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3,900
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3,900
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3,900
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Hypothetical
Final Component Level for SX5E
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6,400
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3,000
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4,650
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Hypothetical
Initial Component Level for NKY
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13,750
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13,750
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13,750
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Hypothetical
Final Component Level for NKY
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22,500
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9,000
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10,000
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Portfolio
Return
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Positive
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Negative
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Positive
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Principal
protected?
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Yes
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Yes
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Yes
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Cash
Settlement Value per Note
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$1,556.77
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$1,000.00
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$1,104.16
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BEAR,
STEARNS & CO.
INC.
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7
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STRUCTURED
PRODUCTS
GROUP
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SELECTED
RISK
CONSIDERATIONS
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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.
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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.
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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 Components;
nor will such payments be included
in the calculation of the Cash Settlement
Value you will receive at
maturity.
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Not
exchange-listed—The
Notes will not be listed on any securities
exchange or quotation system
and we do not expect a trading market
to develop, which may affect the
price that you receive for your Notes
upon any sale prior to maturity. If
you sell the Notes prior to maturity,
you may receive less, and possibly
significantly less, than your initial
investment in the
Notes.
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Liquidity—Because
the Notes will not be listed on any securities
exchange or quotation
system, we do not expect a trading market
to develop, and, if such a
market were to develop, it may not be
liquid. Our subsidiary, Bear,
Stearns & Co. Inc. has advised us that they intend
under ordinary
market conditions to indicate prices
for the Notes on request. However, we
cannot guarantee that bids for outstanding
Notes will be made in the
future; nor can we predict the price
at which those bids will be made. In
any event, Notes will cease trading as
of the close of business on the
Maturity Date.
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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.
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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.
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8