Bear Stearns plans issue of 12% reverse convertibles linked to Valero

By Angela McDaniels

Seattle, Oct. 17 - Bear Stearns Cos. Inc. plans to price an issue of reverse convertible notes linked to the common stock of Valero Energy Corp., according to an FWP filing with the Securities and Exchange Commission.

The coupon is expected to be 12%, and the notes are expected to mature in October 2007. The exact coupon and maturity will be determined at pricing, sometime in October.

Payout at maturity will be par in cash unless Valero 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 Valero shares equal to $1,000 divided by the initial share price, at the option of Bear Stearns.

Bear, Stearns & Co. Inc. will be the agent.

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