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Published on 12/17/2007 in the Prospect News Structured Products Daily.

Merrill Lynch to price 0% Stars linked to Nikkei 225

By Angela McDaniels

Tacoma, Wash., Dec. 17 - Merrill Lynch & Co., Inc. plans to price 0% Strategic Accelerated Redemption Securities (Stars) due February 2010 linked to the Nikkei 225 index, according to an FWP filing with the Securities and Exchange Commission.

The notes will be called at increasing premiums if the index closes at or above its initial level on any of three semiannual observation dates.

The redemption amount will be par of $10 plus between 9% and 13% if the notes are called in February 2009, par plus 13.5% to 19.5% if called in August 2009 and par plus 18% to 26% if called in February 2010. The exact call premiums and dates will be determined at pricing.

If the notes are not called, the payout at maturity will be par if the final index level is at least 90% of the initial level. Otherwise, investors will lose 1% for each 1% index decline beyond 10%.

The notes will price in January and settle in February.

Merrill Lynch & Co. will be the underwriter.


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