Bear Stearns plans issue of 17% reverse convertibles linked to USG

By Angela McDaniels

Seattle, Sept. 29 - Bear Stearns Cos. Inc. plans to price an issue of six-month reverse convertible notes linked to the common stock of USG Corp., according to an FWP filing with the Securities and Exchange Commission.

The notes are expected to pay one coupon payment of 8.5%, for an annualized rate of 17%.

Payout at maturity will be par in cash unless USG stock falls by 20% or more during the life of the notes and finishes below the initial share price, in which case investors will be fully exposed to the stock's decline or will receive a number of USG shares equal to $1,000 divided by the initial share price.

The notes are expected to price on Oct. 4, to settle on Oct. 9 and to mature on April 9, 2007.

Bear, Stearns & Co. Inc. is the agent.

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