Filed
Pursuant to Rule 433
Registration
No. 333−136666
January
12, 2007
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STRUCTURED
EQUITY PRODUCTS
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Indicative
Terms
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New
Issue
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Accelerated
Market
Participation
Securities
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THE
BEAR STEARNS COMPANIES INC.
Note
Linked to the S&P 500®
Index
Due:
February [l],
2008
INVESTMENT
HIGHLIGHTS
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13-month
term to maturity.
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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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Issue
Price: 100.00% of the Principal Amount ($1,000).
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Linked
to the S&P 500®
Index.
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Depending
upon the value of the Index at Maturity, the Note will pay 2
times the
percentage increase in the Index, up to a maximum return of
[17.70-17.80]%.
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·
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If
the Index declines in value by the Maturity Date, the Note will
lose value
at a rate of 1% for every 1% decline in the Index from the Initial
Index
Level.
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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.
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-1-
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STRUCTURED
PRODUCTS GROUP
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TERMS
OF OFFERING
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ISSUER:
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The
Bear Stearns Companies Inc.
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ISSUER’S
RATING:
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A1
/ A+ (Moody’s / S&P)
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CUSIP
NUMBER:
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073928T52
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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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$[3,000,000]
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DENOMINATIONS:
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$1,000
per Note and $1,000 multiples thereafter
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SELLING
PERIOD ENDS:
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January
[l],
2007
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SETTLEMENT
DATE:
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January
[l],
2007
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CALCULATION
DATE:
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February
[l],
2008, subject to adjustment
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MATURITY
DATE:
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February
[l],
2008 (for a term of approximately 13-months)
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CASH
SETTLEMENT VALUE:
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On
the Maturity Date, you will receive the Cash Settlement Value,
an amount
in cash that depends upon the relation of the Final Index Level
to the
Initial Index Level.
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If,
at maturity, the Final Index Level is greater than or equal
to the Initial
Index Level, we will pay you the principal amount of the Notes,
plus the
lesser of:
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$[177.00-178.00].
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If,
at maturity, the Final Index Level is less than the Initial
Index Level,
you will receive less and possibly significantly less, than
the principal
you invested. In this case, we will pay you, per Note:
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INITIAL
INDEX LEVEL:
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The
closing value of the Index, as determined by the Sponsor, on
January
[l],
2007.
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FINAL
INDEX LEVEL:
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The
closing value of the Index, as determined by the Sponsor, on
the
Calculation Date.
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INDEX:
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Standard
& Poor’s 500 Index® (ticker “SPX”), as published by S&P
(the “Sponsor”).
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-2-
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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 January 12, 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 January 12, 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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-3-
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STRUCTURED
PRODUCTS GROUP
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ILLUSTRATIVE
HYPOTHETICAL CASH SETTLEMENT VALUE
TABLE
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The
following is an illustrative table demonstrating the hypothetical Cash
Settlement Value based on the assumptions listed below. Actual returns
may be
different.
ASSUMPTIONS:
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Investor
purchases $1,000 principal amount of Notes at the initial offering
price
of $1,000.
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Investor
does not sell the Notes and holds the Notes to
maturity.
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The
Initial Index Level is equal to
1,425.00.
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The
maximum return on the Notes is
[17.70]%.
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All
returns are based on a 13-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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Initial
Index
Level
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Final
Index
Level
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Percentage
Change
in
Index
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Cash
Settlement
Value
Per
Note
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Return
if
Held
to
Maturity
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Initial
Index
Level
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Final
Index
Level
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Percentage
Change
in
Index
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Cash
Settlement
Value
Per
Note
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Return
if
Held
to
Maturity
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1,425.00
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1,775.00
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+24.56%
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$1,177.00
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17.70%
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1,425.00
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1,412.50
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-0.88%
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$991.23
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-0.88%
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1,425.00
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1,762.50
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+23.68%
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$1,177.00
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17.70%
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1,425.00
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1,400.00
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-1.75%
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$982.46
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-1.75%
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1,425.00
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1,750.00
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+22.81%
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$1,177.00
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17.70%
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1,425.00
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1,387.50
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-2.63%
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$973.68
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-2.63%
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1,425.00
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1,737.50
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+21.93%
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$1,177.00
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17.70%
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1,425.00
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1,375.00
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-3.51%
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$964.91
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-3.51%
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1,425.00
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1,725.00
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+21.05%
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$1,177.00
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17.70%
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1,425.00
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1,362.50
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-4.39%
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$956.14
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-4.39%
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1,425.00
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1,712.50
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+20.18%
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$1,177.00
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17.70%
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1,425.00
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1,350.00
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-5.26%
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$947.37
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-5.26%
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1,425.00
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1,700.00
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+19.30%
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$1,177.00
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17.70%
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1,425.00
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1,337.50
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-6.14%
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$938.60
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-6.14%
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1,425.00
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1,687.50
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+18.42%
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$1,177.00
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17.70%
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1,425.00
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1,325.00
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-7.02%
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$929.82
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-7.02%
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1,425.00
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1,675.00
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+17.54%
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$1,177.00
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17.70%
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1,425.00
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1,312.50
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-7.89%
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$921.05
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-7.89%
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1,425.00
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1,662.50
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+16.67%
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$1,177.00
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17.70%
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1,425.00
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1,300.00
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-8.77%
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$912.28
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-8.77%
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1,425.00
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1,650.00
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+15.79%
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$1,177.00
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17.70%
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1,425.00
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1,287.50
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-9.65%
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$903.51
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-9.65%
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1,425.00
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1,637.50
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+14.91%
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$1,177.00
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17.70%
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1,425.00
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1,275.00
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-10.53%
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$894.74
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-10.53%
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1,425.00
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1,625.00
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+14.04%
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$1,177.00
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17.70%
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1,425.00
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1,262.50
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-11.40%
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$885.96
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-11.40%
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1,425.00
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1,612.50
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+13.16%
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$1,177.00
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17.70%
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1,425.00
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1,250.00
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-12.28%
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$877.19
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-12.28%
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1,425.00
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1,600.00
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+12.28%
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$1,177.00
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17.70%
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1,425.00
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1,237.50
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-13.16%
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$868.42
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-13.16%
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1,425.00
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1,587.50
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+11.40%
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$1,177.00
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17.70%
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1,425.00
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1,225.00
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-14.04%
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$859.65
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-14.04%
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1,425.00
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1,575.00
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+10.53%
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$1,177.00
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17.70%
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1,425.00
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1,212.50
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-14.91%
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$850.88
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-14.91%
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1,425.00
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1,562.50
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+9.65%
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$1,177.00
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17.70%
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1,425.00
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1,200.00
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-15.79%
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$842.11
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-15.79%
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1,425.00
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1,550.00
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+8.77%
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$1,175.44
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17.54%
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1,425.00
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1,187.50
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-16.67%
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$833.33
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-16.67%
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1,425.00
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1,537.50
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+7.89%
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$1,157.89
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15.79%
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1,425.00
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1,175.00
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-17.54%
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$824.56
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-17.54%
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1,425.00
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1,525.00
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+7.02%
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$1,140.35
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14.04%
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1,425.00
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1,162.50
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-18.42%
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$815.79
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-18.42%
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1,425.00
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1,512.50
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+6.14%
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$1,122.81
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12.28%
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1,425.00
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1,150.00
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-19.30%
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$807.02
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-19.30%
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1,425.00
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1,500.00
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+5.26%
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$1,105.26
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10.53%
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1,425.00
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1,137.50
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-20.18%
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$798.25
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-20.18%
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1,425.00
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1,487.50
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+4.39%
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$1,087.72
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8.77%
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1,425.00
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1,125.00
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-21.05%
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$789.47
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-21.05%
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1,425.00
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1,475.00
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+3.51%
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$1,070.18
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7.02%
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1,425.00
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1,112.50
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-21.93%
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$780.70
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-21.93%
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1,425.00
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1,462.50
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+2.63%
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$1,052.63
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5.26%
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1,425.00
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1,100.00
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-22.81%
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$771.93
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-22.81%
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1,425.00
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1,450.00
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+1.75%
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$1,035.09
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3.51%
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1,425.00
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1,087.50
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-23.68%
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$763.16
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-23.68%
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1,425.00
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1,437.50
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+0.88%
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$1,017.54
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1.75%
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1,425.00
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1,075.00
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-24.56%
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$754.39
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-24.56%
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1,425.00
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1,425.00
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0.00%
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$1,000.00
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0.00%
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1,425.00
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1,062.50
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-25.44%
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$745.61
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-25.44%
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-4-
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STRUCTURED
PRODUCTS GROUP
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The
graph
below depicts the hypothetical Cash Settlement Values for the Note structure
as
the level
of the
Index changes.
-5-
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STRUCTURED
PRODUCTS GROUP
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SELECTED
RISK CONSIDERATIONS
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·
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Suitability
of Note for Investment - A
person should reach a decision to invest in the Notes after carefully
considering, with his or her advisors, the suitability of the
Notes in
light of his or her investment objectives and the information
set out in
the Pricing Supplement. Neither the Issuer nor any dealer participating in
the offering makes any recommendation as to the suitability of
the Notes
for investment.
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Not
Principal Protected - The
Notes are not principal protected. If the Final Index Level is
less than
the Initial Index Level, there will be no principal protection
on the
Notes and the Cash Settlement Value you will receive will be
less than the
initial offering price in proportion to the percentage decline
in the
Index. In that case, you will receive less, and possibly significantly
less, than the original public offering price of
$1,000.
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·
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Maximum
return of
[17.70-17.80]%
— You will not receive more than the maximum return of
[17.70-17.80]% at maturity. Because the maximum return on the
Notes is
[17.70-17.80]%, the maximum Cash Settlement Value is $[1,177.00-1,178.00].
Therefore, the Cash Settlement Value will not reflect the increase
in the
value of the Notes if the Initial Index Level increases by more
than
[8.85-8.90]%.
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Secondary Market -
Because the Notes will not be listed on any securities exchange,
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.
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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 Index, nor will such
payments
be included in the calculation of the Cash Settlement Value you
will
receive at maturity.
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Taxes
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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
Index 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).
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-6-