Bear Stearns Successfully Completes First Online Corporate Bond Auction; Setting A Precedent In New Issue Execution

Business Wire, August 10, 2000

Business Editors

NEW YORK--(BUSINESS WIRE)--August 10, 2000

Bear, Stearns & Co. Inc. announced today that it successfully completed the first internet-based auction of corporate debt securities. The transaction was executed on Bear Stearns' proprietary system, Dutch Auction internet Syndication System ("DAiSS"). DAiSS utilizes a modified Dutch Auction pricing engine and offers a transparent system for pricing and allocating securities in the new issue market.

The $600 million 7-year transaction was undertaken on behalf of The Bear Stearns Companies Inc., the parent company of Bear, Stearns & Co. Inc. The transaction generated substantial investor interest with 80 institutional investors generating an aggregate book of demand in excess of $1 Billion. The $600 million transaction was allocated among fifty-seven participating investors. The transaction priced at a spread of 182 basis points over the relevant Treasury benchmark, having been launched with an indicative spread range of 182 to 185 basis points.

During the two-hour auction process, investors utilized the rules-based auction system to express their interest and price sensitivity for the issue. "The transaction met every expectation we had as both an issuer and underwriter. We achieved a substantial book of interest and, consequently, realized economic terms that are highly attractive," according to Samuel L. Molinaro, chief financial officer of The Bear Stearns Companies.

As with traditional syndicate practice, the transaction was preceded by 24 hours of investor marketing and is supported in the primary and secondary markets by an eight dealer co-management group. "The investor feedback was tremendously positive throughout the entire execution process and we feel confident that follow-on investor interest in the transaction will ensure a seamless transition to the secondary market," said Jacques de Saint Phalle, senior managing director and head of US Fixed Income Syndicate.

For further information please contact your Bear Stearns representative or the Bear Stearns Syndicate Desk at 212-272-5371.

Founded in 1923, Bear, Stearns & Co. Inc. is a leading worldwide investment banking and securities trading and brokerage firm, and the major subsidiary of The Bear Stearns Companies Inc. (NYSE:BSC). With approximately $24.6 billion in total capital, Bear Stearns serves governments, corporations, institutions and individuals worldwide. The company's business includes corporate finance and mergers and acquisitions, institutional equities and fixed income sales, trading and research, private client services, derivatives, foreign exchange and futures sales and trading, asset management and custody services. Through Bear, Stearns Securities Corp., it offers global clearing services to broker dealers, prime broker clients and other professional traders, including securities lending. Headquartered in New York City, the company has more than 10,600 employees located in domestic offices in Atlanta, Boston, Chicago, Dallas, Los Angeles, San Francisco and San Juan; and an international presence in Beijing, Buenos Aires, Dublin, Hong Kong, London, Lugano, Sao Paulo, Shanghai, Singapore and Tokyo. For additional information about Bear Stearns, please visit our Web site at http://www.bearstearns.com.