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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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0739283A9
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Issue
Price:
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100.00%
of the Principal Amount.
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Principal
Amount:
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$[
l
]
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Denominations:
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$1,000
per Note and $1,000 multiples thereafter.
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Selling
Period Ends:
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March
[
l
]
,
2008
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Settlement
Date:
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March
[
l
]
,
2008
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Final
Valuation Date:
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March
[
l
]
,
2009 unless such date is not an Index Business Day, in which
case the
Final Valuation Date shall be the next Index Business Day.
The Calculation
Date is subject to adjustment as described in the Pricing Supplement
under
“Description of the Notes—Market Disruption Events.”
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Maturity
Date:
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The
Notes are expected to mature on March [
l
]
,
2009 unless such date is not a Business Day, in which case
the Maturity
Date shall be the next Business Day. If the Final Valuation
Date is
postponed, the Maturity Date will be three Business Days following
the
postponed Final Valuation Date.
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Index:
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Standard
& Poor’s 500
®
Index (ticker “SPX”), as published by Standard & Poor’s, a division of
The McGraw-Hill Companies, Inc. (the “Sponsor”).
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Cash
Settlement Value:
|
On
the Maturity Date, you will receive the Cash Settlement Value,
which is an
amount in cash equal to the $1,000 principal amount of each
Note plus the
Variable Return.
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Variable
Return:
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An
amount determined by the Calculation Agent and calculated in
the following
manner:
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(a)
if at all times during the Observation Period the Index Level
is observed
below the Upper Barrier and above the Lower Barrier, then the
Variable
Return will equal the product of (i) the $1,000 principal amount
of the
Notes multiplied by (ii) the Participation Rate multiplied
by (iii) the
Index Return,
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(b)
however, if at any time during the Observation Period the Index
Level is
observed at or above the Upper Barrier or at or below the Lower
Barrier,
then the Variable Return will be equal to zero.
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Index
Return:
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With
respect to the Final Valuation Date, the absolute value of
the quotient of
(i) the Final Index Level minus the Initial Index Level divided
by (ii)
the Initial Index Level.
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Upper
Barrier:
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The
Index Level that is [118.00-120.00]% of the Initial Index
Level.
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Lower
Barrier:
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The
Index Level that is [80.00-82.00]% of the Initial Index
Level.
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Index
Level:
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A
s
of any time or date of determination during the Observation
Period, the
index level as reported by the Sponsor and displayed on Bloomberg
Professional
®
service
page SPX <Index> <GO>.
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Observation
Period:
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Each
day which is an Index Business Day for the Index from and including
the
Pricing Date to and including the Final Valuation Date.
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Initial
Index Level:
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[
l
]
,
the Index Level on the Pricing Date.
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Final
Index Level:
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Will
be determined by the Calculation Agent and will equal the closing
Index
Level on the Final Valuation Date.
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STRUCTURED
PRODUCTS
GROUP
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Interest:
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The
Notes will not bear interest.
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Participation
Rate:
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[100.00]%
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Pricing
Date:
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March
[
l
]
,
2008.
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Index
Business Day:
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With
respect to the Index, any day on which the Primary Exchange
(as defined
below) and each Related Exchange (as defined below) are scheduled
to be
open for trading.
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Business
Day:
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Any
day other than a Saturday or Sunday, on which banking institutions
in the
cities of New York, New York and London, England are not authorized
or
obligated by law or executive order to be closed.
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Primary
Exchange:
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The
primary exchange or market of trading of any security then
included in the
Index.
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Related
Exchange:
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Each
exchange or quotation system where trading has a material effect
(as
determined by the Calculation Agent) on the overall market
for futures or
options contracts relating to the Index.
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Exchange
listing:
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The
Notes will not be listed on any securities exchange or quotation
system.
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Calculation
Agent:
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Bear,
Stearns & Co. Inc.
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STRUCTURED
PRODUCTS
GROUP
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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 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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·
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Pricing
Supplement dated March 4, 2008 (subject to completion):
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·
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Prospectus
Supplement dated August 16, 2006:
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·
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Prospectus
dated August 16, 2006:
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STRUCTURED
PRODUCTS
GROUP
|
The
following tables and graphs are for illustrative purposes and are not
indicative
of the future performance of the Index or the future value of the
Notes.
Because
the Index Level may be subject to significant fluctuation over the term
of the
Notes, it is not possible to present a chart or table illustrating the
complete
range of all possible Cash Settlement Values. Therefore, the examples
do not
purport to be representative of every possible scenario concerning increases
or
decreases in the Index Level during the term of the Notes or whether,
at any
time during the Observation Period, the Index Level is observed at or
above the
Upper Barrier or at or below the Lower Barrier. You should not construe
these
examples or the data included in any table or graph below as an indication
or
assurance of the expected performance of the Notes.
You
can review the historical levels of the Index in the section of the Pricing
Supplement called “Description of the Index.” The historical performance of the
Index included in the Pricing Supplement should not be taken as an indication
of
the future performance of the Index. It is impossible to predict whether
the
Final Index Level will be greater than or less than the Initial Index
Level or
whether, at any time during the Observation Period, the Index Level will
be
observed above the Upper Barrier or below the Lower Barrier during the
term of
the Notes.
Assumptions
:
|
·
|
Investor
purchases $1,000.00 aggregate principal amount of Notes at
the initial
public offering price of $1,000.00.
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·
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Investor
holds the Notes to maturity.
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·
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The
Initial Index Level is equal to
1,400.00.
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·
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The
Lower Barrier is 1,120.00 (representing 80.00% of the Initial
Index
Level).
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·
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The
Upper Barrier is 1,680.00 (representing 120.00% of the Initial
Index
Level).
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·
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The
Participation Rate is 100.00%.
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·
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All
returns are based on a 12-month term; pre-tax
basis.
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·
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No
Market Disruption Events occur during the term of the
Notes.
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Example
1
|
Example
2
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Example
3
|
Example
4
|
Example
5
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Example
6
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Highest
Index Level during term of Note
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1,652.00
|
1,820.00
|
1,652.00
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1,652.00
|
2,100.00
|
1,610.00
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Upper
Barrier Breached
|
No
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Yes
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No
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No
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Yes
|
No
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Lowest
Index Level during term of Note
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1,127.00
|
1,127.00
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1,190.00
|
980.00
|
910.00
|
1,148.00
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Lower
Barrier Breached
|
No
|
No
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No
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Yes
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Yes
|
No
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Final
Index Level
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1,134.00
|
1,134.00
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1,638.00
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1,652.00
|
2,100.00
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1,437.33
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Index
Return
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-19.00%
|
-19.00%
|
17.00%
|
18.00%
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50.00%
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2.67%
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Variable
Return
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$190.00
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$0.00
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$170.00
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$0.00
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$0.00
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$26.67
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Cash
Settlement Value per Note
|
$1,190.00
|
$1,000.00
|
$1,170.00
|
$1,000.00
|
$1,000.00
|
$1,026.67
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Example
1:
In
this
example, the Index Level, at all times during the Observation Period,
is
observed below the Upper Barrier and above the Lower Barrier. The Index
Return,
as calculated below, is 19.00%.
|
STRUCTURED
PRODUCTS
GROUP
|
Therefore,
the Cash Settlement Value would equal $1,190.00, or the $1,000.00 principal
amount of the Notes plus the Variable Return of $190.00; where the Variable
Return is as calculated below:
Variable
Return = $1,000.00 x Participation Rate x Index Return
Variable
Return = $1,000.00 x 100.00% x 19.00%
Variable
Return = $190.00
In
this
example, although the Final Index Level is lower than the Initial Index
Level,
your return on investment will still be positive (in this case, 19.00%),
because
(1) the Index Return measures the absolute value of the quotient of (i)
the
Final Index Level minus the Initial Index Level divided by (ii) the Initial
Index Level, and (2) at all times during the Observation Period, the
Index Level
was observed below the Upper Barrier and above the Lower Barrier.
Example
2:
In
this
example, the Index Level at some time during the Observation Period is
observed
above the Upper Barrier. Although the Final Index Level in this Example
2 is
equal to the Final Index Level in Example 1, and therefore the Index
Return for
this Example 2 would also equal the Index Return in Example 1, because
the Index
Level at some time during the Observation Period was observed above the
Upper
Barrier the Variable Return equals zero.
Therefore,
the Cash Settlement Value would equal the $1,000.00 principal amount
of the
Notes.
In
this
example, your return on investment would be 0.00%, because at some time
during
the Observation Period the Index Level was observed above the Upper
Barrier.
Example
3:
In
this
example, the Index Level, at all times during the Observation Period,
is
observed below the Upper Barrier and above the Lower Barrier. The Index
Return,
as calculated below, is 17.00%.
Therefore,
the Cash Settlement Value would equal $1,170.00, or the $1,000.00 principal
amount of the Notes plus the Variable Return of $170.00; where the Variable
Return is as calculated below:
Variable
Return = $1,000.00 x Participation Rate x Index Return
Variable
Return = $1,000.00 x 100.00% x 17.00%
Variable
Return = $170.00
In
this
example, your return on investment will be positive (in this case, 17.00%),
because at all times during the Observation Period, the Index Level was
observed
below the Upper Barrier and above the Lower Barrier.
Example
4:
In
this
example, the Index Level at some time during the Observation Period is
observed
below the Lower Barrier. Although the Final Index Level is greater than
the
Initial Index Level, because the Index Level at some time during the
Observation
Period was observed below the Lower Barrier the Variable Return equals
zero.
Therefore,
the Cash Settlement Value would equal the $1,000.00 principal amount
of the
Notes.
In
this
example, your return on investment would be 0.00%, because, at some time
during
the Observation Period the Index Level was observed below the Lower
Barrier.
|
STRUCTURED
PRODUCTS
GROUP
|
Example
5:
In
this
example, the Index Level at some time during the Observation Period is
observed
above the Upper Barrier and the Index Level, at another time during the
Observation Period, is observed below the Lower Barrier. Although the
Final
Index Level is greater than the Initial Index Level, because the Index
Level, at
some time during the Observation Period, was observed above the Upper
Barrier
and the Index Level, at another time during the Observation Period, was
observed
below the Lower Barrier the Variable Return equals zero.
Therefore,
the Cash Settlement Value would equal the $1,000.00 principal amount
of the
Notes.
In
this
example, your return on investment would be 0.00%, because, at some time
during
the Observation Period, the Index Level was observed above the Upper
Barrier
and, at another time during the Observation Period, the Index Level was
observed
below the Lower Barrier
Example
6:
In
this
example, the Index Level, at all times during the Observation Period,
is
observed below the Upper Barrier and above the Lower Barrier. The Index
Return,
as calculated below, is 2.67%.
Therefore,
the Cash Settlement Value would equal $1,026.67, or the $1,000.00 principal
amount of the Notes plus the Variable Return of $26.67; where the Variable
Return is as calculated below:
Variable
Return = $1,000.00 x Participation Rate x Index Return
Variable
Return = $1,000.00 x 100.00% x 2.67%
Variable
Return = $26.67
In
this
example, your return on investment will be positive (in this case, 2.67%),
because at all times during the Observation Period, the Index Level was
observed
below the Upper Barrier and above the Lower Barrier.
|
STRUCTURED
PRODUCTS
GROUP
|