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Free
Writing Prospectus
Filed
Pursuant to Rule 433
Registration
No. 333−136666
June
14, 2007
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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.
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Strategic
Upside Market Mitigating Index Term Securities (“SUMMITS”)
Linked
to a Portfolio of Indices
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Due:
June [l],
2011
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INVESTMENT
HIGHLIGHTS
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4
year term to maturity.
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·
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The
Notes are not principal protected.
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Issue
is a direct obligation of The Bear Stearns Companies Inc. (Rated
A1 by
Moody’s / A+ by S&P).
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·
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Issue
Price: 100.00% of the principal amount ($1,000 per Note) ([99.00]%
for
investors who purchase a principal amount of at least
$1,000,000).
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·
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The
Notes are linked to the performance of a portfolio comprised
of the
following four equity indices with the following respective Weightings
within the portfolio: (1) 50.00% the S&P 500®
Index (the “SPX”); (2) 38.00% the Dow Jones STOXX 50®
Index (the “SX5P”); (3) 10.00% the Nikkei 225™ Stock Index (the “NKY”);
and (4) 2.00% the S&P/ASX 200 Index (the “AS51”) (each such index a
“Component” and together the “Portfolio”.
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·
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The
Cash Settlement Value, will be based on the performance of the
Portfolio
over the term of the Notes as measured by the Portfolio Return.
The
“Portfolio Return” is calculated as the difference of (i) the Final
Portfolio Value divided by the Initial Portfolio Value minus
(ii) one,
where the “Final Portfolio Value” equals the Portfolio Value on the Final
Valuation Date and the “Initial Portfolio Value” equals the Portfolio
Value on the Pricing Date, or 100.
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The
Participation Rate is [130.00]%.
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The
Threshold Level is [75.00]% of the Initial Portfolio Value, or
[75].
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·
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If,
on the Final Valuation Date, the Portfolio Return is greater
than or equal
to zero, the Cash Settlement Value for each Note will be equal
to the
principal amount of the Note, plus the product of: (i) $1,000
multiplied
by (ii) the Portfolio Return, multiplied by (iii) the Participation
Rate.
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·
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If,
on the Final Valuation Date, the Portfolio Return is less than
zero, and
(i) the Portfolio Value, on any Valuation Date, is never calculated
to be
equal to or below the Threshold Level, the Cash Settlement Value
for each
Note will be equal to the $1,000 principal amount; or (ii) the
Portfolio
Value, on any Valuation Date, is calculated to be equal to or
below the
Threshold Level, the Cash Settlement Value for each Note will
be equal to
the product of (a) $1,000 multiplied by (b) the Final Portfolio
Value
divided by Initial Portfolio Value and, in
this case, you will receive less, and possibly significantly
less, than
your initial investment in the Notes.
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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 a portfolio comprised of the following four equity
indices
with the following respective Weightings within the portfolio: (1) 50.00%
the
S&P 500®
Index
(the “SPX”); (2) 38.00% the Dow Jones STOXX 50®
Index
(the “SX5P”); (3) 10.00% the Nikkei 225™ Stock Index (the “NKY”); and (4) 2.00%
the S&P/ASX 200 Index (the “AS51”) (each such index a “Component” and
together the “Portfolio”). 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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A1
/ A+ (Moody’s / S&P)
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CUSIP
NUMBER:
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073928W33
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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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June
[l],
2007
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SETTLEMENT
DATE:
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June
[l],
2007
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MATURITY
DATE:
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June
[l],
2011 (for a term of approximately 48 months). The Maturity
Date is subject
to adjustment as described in the Pricing Supplement.
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COMPONENTS:
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The
Notes are linked to the performance of a portfolio
comprised of the
following four equity indices with the following respective
weightings
within the portfolio: (1) 50.00% the S&P 500®
Index (the “SPX”); (2) 38.00% the Dow Jones STOXX 50®
Index (the “SX5P”); (3) 10.00% the Nikkei 225™ Stock Index (the “NKY”);
and (4) 2.00% the S&P/ASX 200 Index (the “AS51”) (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. (“S&P”) as
the sponsor of the S&P 500®
Index, STOXX Limited, a partnership of Deutsche Börse AG, Dow Jones &
Company and the SWX Group as the sponsor of the Dow
Jones STOXX
50®
Index, Nihon Keizai Shimbun, Inc. as the sponsor of
the Nikkei 225™ Stock
Index and S&P and the Australian Stock Exchange as sponsor of the
S&P/ASX 200 Index 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.
If, on the Final
Valuation Date, the Portfolio Return is greater than
or equal to zero, the
Cash Settlement Value is equal to the $1,000 principal
amount of the
Notes, plus the product of (i) $1,000 multiplied by
(ii) the Portfolio
Return multiplied by (iii) the Participation Rate.
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If,
on the Final Valuation Date, the Portfolio Return is
less than zero, and
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(i)
the Portfolio Value, on any Valuation Date, is never
calculated to be
equal to or below the Threshold Level, the Cash Settlement
Value for each
Note will be equal to the $1,000 principal amount;
or
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(ii)
the Portfolio Value, on any Valuation Date, is calculated
to be equal to
or below the Threshold Level, the Cash Settlement Value
for each Note will
be equal to the product of (i) $1,000 multiplied by
(ii) the Final
Portfolio Value divided by Initial Portfolio Value.
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PORTFOLIO
RETURN:
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An
amount determined by the Calculation Agent and calculated
as the
difference of (i) the Final Portfolio Value divided
by the Initial
Portfolio Value minus (ii) one.
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FINAL
PORTFOLIO VALUE:
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Equals
the Portfolio Value on the Final Valuation Date.
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INITIAL
PORTFOLIO VALUE:
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Equals
the Portfolio Value on the Pricing Date, or 100.
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PORTFOLIO
VALUE:
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On
any Valuation Date, is calculated as
follows:
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BEAR,
STEARNS & CO.
INC.
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2
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STRUCTURED
PRODUCTS GROUP
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FINAL
VALUATION DATE:
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June
[l],
2011; the Final Valuation Date is subject to adjustment
as described in
the Pricing Supplement.
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INDEX
LEVEL:
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As
of any Valuation Date and for each Component, the closing
index level as
reported by the relevant Component Sponsor and displayed
on Bloomberg Page
SPX <Index> <Go> with respect to the SPX, Bloomberg Page SX5P
<Index> <Go> with respect to the SX5P; Bloomberg Page NKY
<Index> <Go> with respect to the NKY; and Bloomberg Page AS51
<Index> <Go> with respect to the AS51.
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VALUATION
DATE:
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Each
day which is a Component Business Day for any Component
from but excluding
the Pricing Date to but excluding the Final Valuation
Date The Valuation
Dates are subject to adjustment as described in the
Pricing Supplement.
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INITIAL
LEVEL:
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Means
(i) [l]
with respect to the SPX; (ii) [l]
with respect to the SX5P; (iii) [l]
with respect to the NKY; and (iv) [l]
with respect to the AS51, in each case, representing
the closing level of
the respective Component on the Pricing Date.
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WEIGHTING:
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Means
(i) 50.00% with respect to the SPX; (ii) 38.00% with
respect to the SX5P;
(iii) 10.00% with respect to the NKY; and (iv) 2.00%
with respect to the
AS51.
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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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[130.00]%
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THRESHOLD
LEVEL:
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[75.00]%
of the Initial Portfolio Value, or [75].
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PRICING
DATE:
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June
[l],
2007
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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 June 14, 2007 (subject to completion)
(the “Pricing
Supplement”). You should carefully consider, among other things, the matters
set
forth in “Risk Factors” in the Prospectus Supplement and the Pricing Supplement,
as the Notes involve risks not associated with conventional debt
securities. We
urge you to consult your investment, legal, tax, accounting and
other advisers
before you invest in the Notes. You may access the Pricing Supplement,
the
Prospectus Supplement and the Prospectus on the SEC web site
as
follows:
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·
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Pricing
Supplement dated June 14, 2007 (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
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.
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 Level for the SPX is equal to 1,525.00.
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The
Initial Level for the SX5P is equal to 4,500.00.
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The
Initial Level for the NKY is equal to
18,000.00.
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The
Initial Level for the AS51 is equal to
6,300.00.
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All
returns are based on a 48-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: At maturity the Portfolio Return is greater than zero and
the Portfolio Value
never equals or falls below the Threshold Level during the term
of the
Notes.
In
this
example, the Portfolio Value generally increases relative to
the Initial
Portfolio Value over the term of the Notes and the Portfolio
Value never equals
or falls below the Threshold Level. On the Final Valuation Date,
the Index
Levels for the SPX, SX5P, NKY and AS51 are 3,048.00, 5,109.00,
28,069.00 and
2,378.00, respectively. On the Final Valuation Date, the Final
Portfolio Value
is 159.43, as calculated below.
The
Final
Portfolio Value equals the following:
The
Portfolio Return equals the difference of (i) the Final Portfolio
Value divided
by the Initial Portfolio Value minus (ii) one, or as follows:
In
this
example, using the formula below, the Cash Settlement Value will
equal
$1,772.59.
Cash
Settlement Value
With
respect to this Example 1, the following graph illustrates a
series hypothetical
Portfolio Values over the term of the Notes and displays such
hypothetical
Portfolio Values in relation to the applicable Threshold Level.
Since the
Portfolio Return would be greater than zero, and the Portfolio
Value never
equaled or fell below the Threshold Level during the term of
the Notes, the Cash
Settlement Value for each Note would be $1,772.59.
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BEAR,
STEARNS & CO.
INC.
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5
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STRUCTURED
PRODUCTS GROUP
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Example
2: The Portfolio Value falls below the Threshold Level during
the term of the
Notes, yet finishes above the Initial Portfolio Value by the
Final Valuation
Date.
In
this
example, during the term of the Notes the Portfolio Value falls
below the
Threshold Level. However, the Portfolio Return on the Final Valuation
Date is
greater than zero. On the Final Valuation Date, the Index Levels
for the SPX,
SX5P, NKY and AS51 are 237.00, 2,624.00, 152,395.00 and 755.00,
respectively. On
the Final Valuation Date, the Final Portfolio Value is 114.83,
as calculated
below.
The
Final
Portfolio Value equals the following:
The
Portfolio Return equals the difference of (i) the Final Portfolio
Value divided
by the Initial Portfolio Value minus (ii) one, or as follows:
In
this
example, using the formula below, the Cash Settlement Value will
equal
$1,192.79.
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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With
respect to this Example 2, the following graph illustrates a
series hypothetical
Portfolio Values over the term of the Notes and displays such
hypothetical
Portfolio Values in relation to the applicable Threshold Level.
Although the
Portfolio Value fell below the Threshold Level during the term
of the Notes,
since the Portfolio Return would be greater than zero the Cash
Settlement Value
for each Note would be $1,192.79.
Example
3: The Portfolio Value never falls below the Threshold Level
during the term of
the Notes, however the Final Portfolio Value is less than the
Initial Portfolio
Value on the Final Valuation Date and the Portfolio Return is
negative.
In
this
example, during the term of the Notes the Portfolio Value never
equals or falls
below the Threshold Level. However, the Portfolio Return on the
Final Valuation
Date is less than zero. On the Final Valuation Date, the Index
Levels for the
SPX, SX5P, NKY and AS51 are 1,799.00, 1,877.00, 6,988.00 and
3,606.00,
respectively. On the Final Valuation Date, the Final Portfolio
Value is 79.86,
as calculated below.
The
Final
Portfolio Value equals the following:
The
Portfolio Return equals the difference of (i) the Final Portfolio
Value divided
by the Initial Portfolio Value minus (ii) one, or as follows:
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BEAR,
STEARNS & CO.
INC.
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7
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STRUCTURED
PRODUCTS GROUP
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Cash
Settlement Value
Since
the
Portfolio Return would be less than zero, but the Portfolio Value
never equaled
or fell below the Threshold Level during the term of the Notes,
the Cash
Settlement Value for each Note would be the principal amount
of $1,000.
With
respect to this Example 3, the following graph illustrates a
series hypothetical
Portfolio Values over the term of the Notes and displays such
hypothetical
Portfolio Values in relation to the applicable Threshold Level.
Example
4: At maturity the Portfolio Return is less than zero and the
Portfolio Value
falls below the Threshold Level during the term of the Notes.
In
this
example, during the term of the Notes the Portfolio Value falls
below the
Threshold Level and the Portfolio Return on the Final Valuation
Date is less
than zero. On the Final Valuation Date, the Index Levels for
the SPX, SX5P, NKY
and AS51 are 360.00, 3,006.00, 68,706.00 and 262.00, respectively.
On the Final
Valuation Date, the Final Portfolio Value is 75.44, as calculated
below.
The
Final
Portfolio Value equals the following:
The
Portfolio Return equals the difference of (i) the Final Portfolio
Value divided
by the Initial Portfolio Value minus (ii) one, or as follows:
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BEAR,
STEARNS & CO.
INC.
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8
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STRUCTURED
PRODUCTS GROUP
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In
this
example, using the formula below, the Cash Settlement Value will
equal
$754.40.
Cash
Settlement Value
With
respect to this Example 4, the following graph illustrates a
series hypothetical
Portfolio Values over the term of the Notes and displays such
hypothetical
Portfolio Values in relation to the applicable Threshold Level.
Since the
Portfolio Return would be less than zero, and the Portfolio Value
fell below the
Threshold Level during the term of the Notes, the Cash Settlement
Value for each
Note would be $754.40.
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BEAR,
STEARNS & CO.
INC.
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9
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STRUCTURED
PRODUCTS GROUP
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Summary
of Illustrative Examples 1-4 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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Example
4
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Initial
Portfolio Value
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100.00
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100.00
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100.00
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100.00
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Hypothetical
Final Portfolio Value
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159.43
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114.84
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79.86
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75.44
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Portfolio
Value ever equal to or less than Threshold Level
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No
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Yes
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No
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Yes
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Portfolio
Return (expressed as a percentage)
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59.43%
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14.84%
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-20.14%
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-24.56%
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Participation
Rate
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130.00%
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130.00%
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130.00%
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130.00%
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Cash
Settlement Value per Note
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$1,772.59
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$1,192.97
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$1,000.00
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$754.40
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The
following two graphs illustrate the hypothetical Cash Settlement
Value per
$1,000 principal amount of Notes if either (i) as in Scenario
1 below the
Portfolio Value never equals or falls below the Threshold Level
at any time
during the term of the Notes or (ii) as in Scenario 2 below the
Portfolio Value
does equal or fall below the Threshold Level at any time during
the term of the
Notes.
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BEAR,
STEARNS & CO.
INC.
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10
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STRUCTURED
PRODUCTS GROUP
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Graphs
of Hypothetical Cash Settlement Values
Scenario
1
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BEAR,
STEARNS & CO.
INC.
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11
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STRUCTURED
PRODUCTS GROUP
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Scenario
2
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BEAR,
STEARNS & CO.
INC.
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12
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STRUCTURED
PRODUCTS GROUP
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SELECTED
RISK CONSIDERATIONS
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·
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Possible
loss of principal—The Notes are not principal protected. If,
on
the Final Valuation Date, (i) the Portfolio Return
is less than zero and
(ii) the Portfolio Value, on any Valuation Date, was
calculated to be
equal to or below the Threshold Level, there will be
no principal
protection for the Notes and the Cash Settlement Value
you will receive
will be less than the initial offering price. In that
case, you will
receive less, and possibly significantly less, than
your initial
investment in the Notes.
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·
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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.
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·
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No
interest, dividend or other payments—You
will not receive any interest, dividend payments or
other distributions on
the stocks or indices 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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·
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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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·
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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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BEAR,
STEARNS & CO.
INC.
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13