Filed
Pursuant to Rule 433
Registration
No. 333−136666
January
10, 2007
 |
STRUCTURED
EQUITY PRODUCTS
|
|||
|
Indicative
Terms
|
||||
|
|
New
Issue
|
|||
 |
||||
|
THE
BEAR STEARNS COMPANIES INC.
3
Year Notes Linked to the Outperformance of the ISE SINdex® Index Relative
to the Standard and Poor’s S&P 500®
|
||||
|
Due
January [l],
2010
INVESTMENT
HIGHLIGHTS
|
||||
|
·
|
3
year term to maturity.
|
|
|
·
|
The
Notes are not principal protected.
|
|
|
·
|
Issue
is a direct obligation of The Bear Stearns Companies Inc. (Rated
A1 by
Moody’s / A+ by S&P).
|
|
|
·
|
Issue
Price: 100.00% of the Principal Amount (99.00% for investors who
purchase
a Principal Amount of $1,000,000 or greater)
|
|
|
·
|
Linked
to the outperformance of the ISE SINdex® Index relative to the Standard
and Poor’s S&P 500® (with [150]% Upside
Participation).
|
|
|
·
|
If,
at maturity, the Relative Return is equal to or greater than 0%,
then, on
the Maturity Date, you will receive an amount per $1,000 Note equal
to the
sum of: (i) $1,000, plus (ii) $1,000 multiplied by [150]% of the
Relative
Return.
|
|
|
·
|
If,
at maturity, the Relative Return is negative, then, on the Maturity
Date,
you will receive an amount per $1,000 Note equal to the difference
of: (i)
$1,000, minus (ii) $1,000 times the absolute value of the Relative
Return.
|
|
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.
|
|||
|
|
STRUCTURED
PRODUCTS GROUP
|
|
GENERAL
TERMS FOR THE NOTE
OFFERING
|
This
free
writing prospectus relates to the offering of Notes linked to the outperformance
of the ISE SINdex® Index (the “SINdex”) relative to the S&P 500® Index (the
“S&P500”, and along with the SINdex, each an “Index” and collectively the
“Indices”). 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 Prospectus
Supplement discussed below.
|
ISSUER:
|
The
Bear Stearns Companies Inc.
|
|
ISSUER’S
RATING:
|
A1
/ A+ (Moody’s / S&P)
|
|
CUSIP
NUMBER:
|
073928T29
|
|
ISSUE
PRICE:
|
100.00%
of the Principal Amount (99.00% for investors who purchase a Principal
Amount of $1,000,000 or greater).
|
|
PRINCIPAL
AMOUNT:
|
$[l]
|
|
DENOMINATIONS:
|
$1,000
per Note and $1,000 multiples thereof.
|
|
SELLING
PERIOD ENDS:
|
January
[l],
2007
|
|
SETTLEMENT
DATE:
|
January
[l],
2007
|
|
CALCULATION
DATE:
|
January
[l],
2010. The Calculation Date is subject to adjustment as described
in the
Pricing Supplement under “Description of the Notes - Market Disruption
Events.”
|
|
MATURITY
DATE:
|
January
[l],
2010 (for a term of approximately 3 years)
|
|
CASH
SETTLEMENT VALUE:
|
If,
at maturity, the Relative Return is equal to or greater than 0%,
then, on
the Maturity Date, you will receive an amount per $1,000 Note equal
to the
sum of: (i) $1,000, plus (ii) $1,000 multiplied by [150]% of the
Relative
Return.
|
|
|
If,
at maturity, the Relative Return is negative, then, on the Maturity
Date,
you will receive an amount per $1,000 Note equal to the difference
of: (i)
$1,000, minus (ii) $1,000 times the absolute value of the Relative
Return.
In any event, the Cash Settlement Value is subject to a minimum
of zero.
If
the Relative Return is negative at maturity, investors may lose
up to 100%
of the principal amount of their Notes.
|
|
UPSIDE
PARTICIPATION RATE:
|
[150]%
|
|
RELATIVE
RETURN:
|
The
amount, expressed as a percentage, resulting from the difference
of: (i)
the Index Return of the SINdex minus (ii) the Index Return of the
S&P500.
|
|
INDEX
RETURN:
|
With
respect to each Index, the amount, expressed as a percentage, resulting
from the quotient of: (i) the Final Index Level of such Index divided
by
(ii) its Initial Index Level.
|
|
INDEX
LEVEL:
|
As
of any date of determination, and with respect to each Index, the
closing
value of such Index, as determined by the related Sponsor, on each
Index
Business Day.
|
|
INITIAL
INDEX LEVEL:
|
Equals
[l],
with respect to the SINdex, and [l]
with respect to the S&P500, representing the closing value of each
Index, as determined by the related Sponsor, on January [l],
2007.
|
|
FINAL
INDEX LEVEL:
|
Will
be determined by the Calculation Agent and will equal the closing
value of
each Index, as determined by the related Sponsor, on the Calculation
Date.
|
|
INTEREST:
|
The
Notes will not bear interest.
|
|
EXCHANGE
LISTING:
|
The
Notes will not be listed on any securities exchange or quotation
system.
|
BEAR,
STEARNS & CO. INC.
-2-
|
|
STRUCTURED
PRODUCTS GROUP
|
|
BUSINESS
DAY:
|
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.
|
|
RELATED
EXCHANGE:
|
With
respect to each Index 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 applicable
Index.
|
|
PRIMARY
EXCHANGE:
|
With
respect to each Index the primary exchange or market of trading
of any
security then included in the Index.
|
|
INDICES:
|
The
ISE SINdex®
Index is calculated and maintained by Standard & Poor’s, a division of
The McGraw-Hill Companies, Inc. (“S&P”) based on a methodology
developed by International Securities Exchange, Inc. (“ISE”) in
consultation with S&P. ISE’s indices are designed to track the
performance of the most highly capitalized publicly traded companies
in
specific industry sectors. The SINdex is comprised of stocks issued
by the
owners and operators of casinos and gaming facilities, producers
of beer
and malt liquors, distillers, vintners and producers of other alcoholic
beverages, and manufacturers of cigarettes and other tobacco
products.
|
|
|
The
S&P 500®
Index is an index published, calculated and disseminated by S&P. The
S&P500 is a capitalization weighted index and is intended to provide
an indication of the pattern of common stock price movement. The
calculation of the level of the S&P500, is based on the relative value
of the aggregate market value of the common stocks of 500 companies
as of
a particular time compared to the aggregate average market value
of the
common stocks of 500 similar companies during the base period of
the years
1941 through 1943.
|
BEAR,
STEARNS & CO. INC.
-3-
|
|
STRUCTURED
PRODUCTS GROUP
|
|
ADDITIONAL
TERMS SPECIFIC TO THE
NOTES
|
You
should read this document together with the prospectus and prospectus
supplement, each dated August 16, 2006 (the “Prospectus” and “Prospectus
Supplement,” respectively), and the more detailed information contained in the
Pricing Supplement, dated January [l],
2007 (the “Pricing Supplement”). You should carefully consider, among other
things, the matters set forth in “Risk Factors” in the Prospectus Supplement and
the Pricing Supplement, as the Notes involve risks not associated with
conventional debt securities. We urge you to consult your investment, legal,
tax, accounting and other advisers before you invest in the Notes. You may
access the Pricing Supplement, the Prospectus Supplement and the Prospectus
on
the SEC web site as follows:
|
·
|
Pricing
Supplement dated
January [l],
2007:
|
|
·
|
Prospectus
Supplement dated August 16, 2006:
|
|
·
|
Prospectus
dated August 16, 2006:
|
|
ILLUSTRATIVE
CASH SETTLEMENT VALUE
TABLE
|
The
following is an illustrative table demonstrating the hypothetical Cash
Settlement Value of a Note based on the assumptions listed below. Actual
returns
may be different.
ASSUMPTIONS:
|
·
|
Investor
purchases $1,000 aggregate principal amount of Notes at the initial
public
offering price of $1,000.
|
|
·
|
Investor
holds the Notes to maturity.
|
|
·
|
The
Upside Participation Rate is
[150]%.
|
|
·
|
All
returns are based on a 3-year term and are stated on a pre-tax
basis.
|
|
·
|
No
Market Disruption Events or Events of Default occur during the
term of the
Notes.
|
|
Relative
Return
|
Cash
Settlement
Value
Per Note
|
Return
if Held to
Maturity
|
Relative
Return
|
Cash
Settlement
Value
Per Note
|
Return
if Held to
Maturity
|
|
|
100%
|
$2,500
|
150.00%
|
-5%
|
$950
|
-5.00%
|
|
|
95%
|
$2,425
|
142.50%
|
-10%
|
$900
|
-10.00%
|
|
|
90%
|
$2,350
|
135.00%
|
-15%
|
$850
|
-15.00%
|
|
|
85%
|
$2,275
|
127.50%
|
-20%
|
$800
|
-20.00%
|
|
|
80%
|
$2,200
|
120.00%
|
-25%
|
$750
|
-25.00%
|
|
|
75%
|
$2,125
|
112.50%
|
-30%
|
$700
|
-30.00%
|
|
|
70%
|
$2,050
|
105.00%
|
-35%
|
$650
|
-35.00%
|
|
|
65%
|
$1,975
|
97.50%
|
-40%
|
$600
|
-40.00%
|
|
|
60%
|
$1,900
|
90.00%
|
-45%
|
$550
|
-45.00%
|
|
|
55%
|
$1,825
|
82.50%
|
-50%
|
$500
|
-50.00%
|
|
|
50%
|
$1,750
|
75.00%
|
-55%
|
$450
|
-55.00%
|
|
|
45%
|
$1,675
|
67.50%
|
-60%
|
$400
|
-60.00%
|
|
|
40%
|
$1,600
|
60.00%
|
-65%
|
$350
|
-65.00%
|
|
|
35%
|
$1,525
|
52.50%
|
-70%
|
$300
|
-70.00%
|
|
|
30%
|
$1,450
|
45.00%
|
-75%
|
$250
|
-75.00%
|
|
|
25%
|
$1,375
|
37.50%
|
-80%
|
$200
|
-80.00%
|
|
|
20%
|
$1,300
|
30.00%
|
-85%
|
$150
|
-85.00%
|
|
|
15%
|
$1,225
|
22.50%
|
-90%
|
$100
|
-90.00%
|
|
|
10%
|
$1,150
|
15.00%
|
-95%
|
$50
|
-95.00%
|
|
|
5%
|
$1,075
|
7.50%
|
-100%
|
$0
|
-100.00%
|
|
|
0%
|
$1,000
|
0.00%
|
BEAR,
STEARNS & CO. INC.
-4-
|
|
STRUCTURED
PRODUCTS GROUP
|
SINdex:
The
following table sets forth the quarterly high and low intraday levels, as
well
as end-of-quarter final levels, of the SINdex for each quarter in the period
from January 1, 2002 through December 29, 2006. The final level of the SINdex
on
December 29, 2006 was 113.14. We obtained the data in the following table
from
Bloomberg Financial Service, without independent verification by us. The
SINdex
began publishing on June 1, 2005. Therefore, all levels provided prior to
June
1, 2005 represent the Sponsor’s application of the index methodology, as
described in the Pricing Supplement, “Description of the Indices”, beginning
with the initial selection of the Index components on December 31, 1998,
in
order to reconstruct historical data consistent with the Sponsor’s methodology
for the period prior to June 1, 2005. Historical levels of the SINdex should
not
be taken as an indication of future performance and no assurance can be given
that the level of the SINdex will increase relative to its Initial Index
Level
during the term of the notes.
|
Quarter
Ending
|
Quarterly
High
|
Quarterly
Low
|
Quarterly
Close
|
|
March
29, 2002
|
50.16
|
43.54
|
50.16
|
|
June
28, 2002
|
54.00
|
45.06
|
45.82
|
|
September
30, 2002
|
46.22
|
39.35
|
43.53
|
|
December
31, 2002
|
44.69
|
40.76
|
44.40
|
|
March
31, 2003
|
45.22
|
40.36
|
42.46
|
|
June
30, 2003
|
51.47
|
42.12
|
50.79
|
|
September
30, 2003
|
54.07
|
49.26
|
52.75
|
|
December
31, 2003
|
61.10
|
53.40
|
61.08
|
|
March
31, 2004
|
68.25
|
61.05
|
67.99
|
|
June
30, 2004
|
70.17
|
63.54
|
68.47
|
|
September
30, 2004
|
69.99
|
64.05
|
69.99
|
|
December
31, 2004
|
83.26
|
69.72
|
83.07
|
|
March
31, 2005
|
87.94
|
81.03
|
85.74
|
|
June
30, 2005
|
87.37
|
80.56
|
82.85
|
|
September
30, 2005
|
86.55
|
81.82
|
84.08
|
|
December
30, 2005
|
88.35
|
78.65
|
87.83
|
|
March
31, 2006
|
98.41
|
87.51
|
97.36
|
|
June
30, 2006
|
102.52
|
92.13
|
97.16
|
|
September
29, 2006
|
99.90
|
93.74
|
99.31
|
|
December
29, 2006
|
113.60
|
99.31
|
113.14
|
BEAR,
STEARNS & CO. INC.
-5-
|
|
STRUCTURED
PRODUCTS GROUP
|
S&P
500:
The
following table sets forth the quarterly high and low intraday levels, as
well
as end-of-quarter final levels, of the S&P500 for each quarter in the period
from January 1, 2002 through December 29, 2006. The final level of the
S&P500 on December 29, 2006 was 1,418.30. We obtained the data in the
following table from Bloomberg Financial Service, without independent
verification by us. Historical levels of the S&P500 should not be taken as
an indication of future performance and no assurance can be given that the
level
of the S&P500 will increase relative to its Initial Index Level during the
term of the notes.
|
Quarter
Ending
|
Quarterly
High
|
Quarterly
Low
|
Quarterly
Close
|
|
March 29,
2002
|
1,176.97
|
1,074.36
|
1,147.39
|
|
June 28,
2002
|
1,147.84
|
952.92
|
989.82
|
|
September 30,
2002
|
994.46
|
775.68
|
815.28
|
|
December 31,
2002
|
954.28
|
768.63
|
879.82
|
|
March 31,
2003
|
935.05
|
788.90
|
848.18
|
|
June 30,
2003
|
1,015.33
|
847.85
|
974.50
|
|
September 30,
2003
|
1,040.29
|
960.84
|
995.97
|
|
December 31,
2003
|
1,112.56
|
995.97
|
1,111.92
|
|
March 31,
2004
|
1,163.23
|
1,087.06
|
1,126.21
|
|
June 30,
2004
|
1,150.57
|
1,076.32
|
1,140.84
|
|
September 30,
2004
|
1,140.84
|
1,060.72
|
1,114.58
|
|
December 31,
2004
|
1,217.33
|
1,090.19
|
1,211.92
|
|
March 31,
2005
|
1,229.11
|
1,163.69
|
1,180.59
|
|
June
30, 2005
|
1,219.59
|
1,136.15
|
1,191.33
|
|
September 30,
2005
|
1,245.86
|
1,183.55
|
1,228.81
|
|
December 30,
2005
|
1,275.80
|
1,168.20
|
1,248.29
|
|
March 31,
2006
|
1,310.88
|
1,245.74
|
1,294.83
|
|
June 30,
2006
|
1,326.70
|
1,219.29
|
1,270.20
|
|
September
29, 2006
|
1,340.28
|
1,224.54
|
1,335.85
|
|
December
29, 2006
|
1,431.81
|
1,327.10
|
1,418.30
|
BEAR,
STEARNS & CO. INC.
-6-
|
|
STRUCTURED
PRODUCTS GROUP
|
|
HISTORICAL
RELATIVE PERFORMANCE DATA AND HYPOTHETICAL NOTE
PERFORMANCE
|
The
following historical information and hypothetical note performance should
not be
taken as an indication of the future performance of the SINdex, the S&P500,
the SINdex relative to the S&P500, or of the Notes.
The
Notes
do not have a trading history. As a consequence, the following historical
relative performance data and hypothetical note performance is based on the
actual historical performance of the SINdex relative to the S&P500.
No
future performance of the Notes or the Indices may be inferred from any of
the
historical data set forth below.
The
hypothetical note performance data presented in Figure 1 below represents
reconstructions of a series of hypothetical investments on every quarter
ending
date during the relevant periods described below. The performance of
hypothetical investments is linked to a historical reconstruction of the
performance of the SINdex relative to the S&P500 based on the actual
historical performance of the SINdex relative to the S&P500. The
hypothetical cash settlement values expressed in Figure 1 below use a
methodology identical to the methodology that will be used for the Notes.
The
Sponsors are responsible for calculating and maintaining the Indices. The
policies of the Sponsors concerning the calculation of the Indices will affect
the Index Return and, therefore, will affect the value of the Notes. In
addition, if a Sponsor discontinues or suspends calculation or publication
of an
Index, it may adversely affect the value of the Notes. See the Pricing
Supplement, “Description of the Notes - Discontinuance or Modification of one or
more Indices.” The policies of the Sponsors regarding the Indices is impossible
to predict. See generally, the Pricing Supplement, “Risk Factors - Changes that
affect the calculation of the Indices will affect the trading value of the
Notes
and the amount you will receive at maturity.”
A
Sponsor
can add, delete or substitute the stocks underlying an Index or make other
methodological changes that could alter the Index Levels and adversely affect
the value of the Notes. Changes in the companies included in the Indices
may
affect the Indices, as a newly added company may perform significantly better
or
worse than the company or companies it replaces. See generally, the Pricing
Supplement, “Risk Factors - A Sponsor may change the companies underlying the
Indices in a way that affects the Index Levels and consequently the value
of the
Notes.”
All
of
the historical relative performance data and the hypothetical note performance
set forth below was derived from data provided on the Bloomberg Financial
Service with respect to each Index, in each case, without independent
verification from the Issuer.
The
historical relative performance data and the hypothetical note performance
presented in Figures 1 and 2 below represent the historical relative performance
and hypothetical note performance over a series of 3 year periods beginning
on
every quarter ending date from and including December 31, 1998 to and including
December 31, 2003.
BEAR,
STEARNS & CO. INC.
-7-
|
|
STRUCTURED
PRODUCTS GROUP
|
Figure
1 - Rolling
3 year Index Returns of the SINdex and the S&P 500, performance of the
SINdex relative to the S&P 500, and hypothetical cash settlement values
based on performance of the SINdex relative to the
S&P500
The
chart
below illustrates the calculation of (i) the Index Return for the SINdex
and the
S&P500, (ii) 3 year performance of the SINdex relative to the S&P500,
and (iii) the hypothetical cash settlement value available to an investor
based
on a $1,000 investment in a hypothetical note for each 3-year rolling return
period ending on the last day of each quarter between December 31, 2001 and
December 29, 2006 inclusive, based on the quarterly closing levels of the
SINdex
and S&P500 for each such period. The hypothetical cash settlement values are
derived from calculating the sum of: (i) a $1,000 initial investment, plus
(ii)
$1,000 multiplied by [150]% of the rolling 3 year performance of the SINdex
relative to the S&P500 for the applicable period.
The
SINdex began publishing on June 1, 2005. Therefore, all levels provided for
the
SINdex prior to June 1, 2005 represent the Sponsor’s application of the index
methodology, as described in the Pricing Supplement, “Description of the
Indices”, beginning with the initial selection of the Index components on
December 31, 1998, in order to reconstruct historical data consistent with
the
Sponsor’s methodology for the period prior to June 1, 2005.
|
Maturity
Date
|
Rolling
3 year Index
Return
for the SINdex
|
Rolling
3 year Index
Return
for the S&P500
|
Rolling
3 year
performance
of the
SINdex
relative to the
S&P500
|
Hypothetical
cash
settlement
value per
$1,000
note based on 3
year
performance of the
SINdex
relative to the
S&P500
|
|
December
31, 2001
|
+74.04%
|
-6.60%
|
+80.64%
|
$2,209.63
|
|
March
29, 2002
|
+95.02%
|
-10.80%
|
+105.83%
|
$2,587.41
|
|
June
28, 2002
|
+59.21%
|
-27.89%
|
+87.10%
|
$2.306.51
|
|
September
30, 2002
|
+45.05%
|
-36.44%
|
+81.49%
|
$2,222.39
|
|
December
31, 2002
|
+62.10%
|
-40.12%
|
+102.22%
|
$2,533,31
|
|
March
31, 2003
|
+70.87%
|
-43.40%
|
+114.27%
|
$2,713.99
|
|
June
30, 2003
|
+72.29%
|
-33.01%
|
+105.29%
|
$2,579.38
|
|
September
30, 2003
|
+54.60%
|
-30.67%
|
+85.27%
|
$2,279.03
|
|
December
31, 2003
|
+56.41%
|
-15.78%
|
+72.20%
|
$2,082.95
|
|
March
31, 2004
|
+68.08%
|
-2.94%
|
+71.02%
|
$2,065.37
|
|
June
30, 2004
|
+57.98%
|
-6.83%
|
+64.81%
|
$1,972.14
|
|
September
30, 2004
|
+88.60%
|
+7.07%
|
+81.53%
|
$2,222.91
|
|
December
31, 2004
|
+90.92%
|
+5.56%
|
+85.36%
|
$2,280.42
|
|
March
31, 2005
|
+70.93%
|
+2.89%
|
+68.04%
|
$2,020.59
|
|
June
30, 2005
|
+80.82%
|
+20.36%
|
+60.46%
|
$1,906.87
|
|
September
30, 2005
|
+93.15%
|
+50.72%
|
+42.43%
|
$1,636.48
|
|
December
30, 2005
|
+97.82%
|
+41.88%
|
+55.94%
|
$1,839.03
|
|
March
31, 2006
|
+129.30%
|
+52.66%
|
+76.64%
|
$2,149.58
|
|
June
30, 2006
|
+91.30%
|
+30.34%
|
+60.95%
|
$1,914.31
|
|
September
29, 2006
|
+88.27%
|
+34.13%
|
+54.14%
|
$1,812.10
|
|
December
29, 2006
|
+85.23%
|
+27.55%
|
+57.68%
|
$1,865.18
|
The
hypothetical note performance data presented in Figure 1 above represents
reconstructions of a series of hypothetical investments on every quarter
ending
date during the relevant periods described above. The performance of
hypothetical investments is linked to a historical reconstruction of the
performance of the SINdex relative to the S&P500 based on the actual
historical performance of the SINdex relative to the S&P500. The
hypothetical cash settlement value expressed in Figure 1 above uses a
methodology identical to the methodology that will be used for the Notes.
BEAR,
STEARNS & CO. INC.
-8-
|
|
STRUCTURED
PRODUCTS GROUP
|
Figure
2 - Graphical illustration of the results in Figure 1
BEAR,
STEARNS & CO. INC.
-9-
|
|
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.
|
|
|
·
|
Possible
Loss of Principal - The
Notes are not principal protected. If, at maturity, the Relative
Return is
negative, then, on the Maturity Date, you will receive an amount
equal to
100% of the original principal amount of the Note minus the product
of:
(i) the original principal amount multiplied by (ii) the absolute
value of
the Relative Return. In any event, the Cash Settlement Value is
subject to
a minimum of zero. If
the Relative Return is negative at maturity, investors may lose
up to 100%
of the principal amount of their
Notes.
|
|
|
·
|
Secondary Market
- Because
the Notes will not be listed on any securities exchange or quotation
system, a secondary trading market is not expected to develop,
and, if
such a market were to develop, it may not be liquid. Bear, Stearns
&
Co. Inc. intends under ordinary market conditions to indicate prices
for
the Notes on request. However, there can be no guarantee that bids
for
outstanding Notes will be made in the future; nor can the prices
of those
bids be predicted.
|
|
|
·
|
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.
|
|
|
·
|
No
dividend or other payments —
You will not receive any dividend payments or other distributions
on the
stocks underlying the Indices, nor will such payments be included
in the
calculation of the Cash Settlement Value you will receive at
maturity.
|
|
|
·
|
Equity
market risks —
We expect that the Index Levels will fluctuate in accordance with
changes
in the financial condition of the companies issuing the stocks
comprising
the Indices, the value of the underlying stocks comprising the
Indices
generally and other factors. The Indices are susceptible to general
equity
market fluctuations and to volatile increases and decreases in
value, as
market confidence in and perceptions regarding the underlying stocks
comprising the Indices change. Investor perceptions regarding the
companies issuing the stocks comprising the Indices are based on
various
and unpredictable factors, including expectations regarding government,
economic, monetary and fiscal policies, inflation and interest
rates,
economic expansion or contraction, and global or regional political,
economic, and banking crises. The Index Levels may be expected
to
fluctuate until the Maturity Date.
|
|
|
·
|
Historical
relative performance data - The
historical relative performance data set forth in the “Historical Relative
Performance Data” section should not be taken as an indication of either
the future performance of the Indices over the term of the Notes
or of the
Notes themselves. The Notes do not have a trading history. As a
consequence, investors should understand that the historical relative
performance data is based on the actual historical performance
of the
SINdex relative to the S&P500 and it is impossible to predict whether
the Index Levels will fall or rise over the term of the
Notes.
|
|
|
·
|
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 value
of the Indices 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).
|
|
LICENSE
AGREEMENT WITH
S&P
|
We
have
entered into a non-exclusive license agreement providing for the license
to us,
in exchange for a fee, of the right to use indices owned and published by
Standard & Poor’s in connection with some securities, including the
notes.
The
notes are not sponsored, endorsed, sold or promoted by Standard & Poor’s, a
division of The McGraw Hill Companies, Inc. Standard & Poor’s makes no
representation or warranty, express or implied, to the holders of the notes
or
any member of the public regarding the advisability of investing in securities
generally or in the notes particularly or the ability of the S&P 500® to
track general stock market performance. Standard & Poor’s only relationship
to Bear Stearns Companies Inc. (other than transactions entered into in the
ordinary course of business) is the licensing of certain service marks and
trade
names of Standard & Poor’s and of the S&P 500® which is determined,
composed and calculated by Standard & Poor’s without regard to Bear Stearns
Companies Inc .or the notes. Standard & Poor’s has no obligation to take the
needs of Bear Stearns Companies Inc. or the holders of the notes into
consideration in determining, composing or calculating the S&P 500®.
Standard & Poor’s is not responsible for and has not participated in the
determination of the timing of the sale of the notes, prices at which the
notes
are to initially be sold, or quantities of the notes to be issued or in the
determination or calculation of the equation by which the notes are to be
converted into cash. Standard & Poor’s has no obligation or liability in
connection with the administration, marketing or trading of the
notes.
BEAR,
STEARNS & CO. INC.
-10-
|
|
STRUCTURED
PRODUCTS GROUP
|
STANDARD
AND POOR’S DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE
S&P 500®, OR ANY DATA INCLUDED THEREIN AND STANDARD AND POOR’S SHALL HAVE NO
LIABILITY FOR ANY ERRORS, OMISSIONS, OR INTERRUPTIONS THEREIN. STANDARD AND
POOR’S MAKES NO WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY
HSBC USA INC., OWNERS OF THE NOTES OR ANY OTHER PERSON OR ENTITY FROM THE
USE OF
THE S&P 500® OR ANY DATA INCLUDED THEREIN. STANDARD AND POOR’S MAKES NO
EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS ALL WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO
THE
S&P 500® OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE
FOREGOING, IN NO EVENT SHALL STANDARD AND POOR’S HAVE ANY LIABILITY FOR ANY
SPECIAL, PUNITIVE, INDIRECT, OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS),
EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.
“STANDARD
& POOR’S®”, “S&P®”, “S&P 500®”, “STANDARD & POOR'S 500”, AND
“500” ARE TRADEMARKS OF THE MCGRAW-HILL COMPANIES, INC. THE FOREGOING MARKS HAVE
BEEN LICENSED FOR USE BY BEAR STEARNS COMPANIES INC. THE NOTES ARE NOT
SPONSORED, ENDORSED, SOLD OR PROMOTED BY STANDARD & POOR'S AND STANDARD
& POOR'S MAKES NO REPRESENTATION, WARRANTY, OR CONDITION REGARDING THE
ADVISABILITY OF INVESTING IN THE NOTES.
|
LICENSE
AGREEMENT WITH THE ISE
|
We
have
entered into a non-exclusive license agreement with ISE providing for the
license to us, in exchange for a fee, of the right to use the SINdex in
connection with certain securities, including the Notes.
The
Notes
are not sponsored, endorsed, sold or promoted by ISE. ISE makes no
representation or warranty, express or implied, to the owners of the Notes
or
any member of the public regarding the advisability of investing in securities
generally or in the Notes particularly.
All
disclosures contained in this pricing supplement regarding the SINdex, including
its make-up, method of calculation and changes in its Components, are derived
from publicly available information prepared by ISE. None of us, Bear Stearns
or
the Trustee assumes any responsibility for the accuracy or completeness of
such
information.
BEAR,
STEARNS & CO. INC.
-11-