Bear Stearns establishes triple-A-rated derivatives subsidiaries.

NEW YORK--(BUSINESS WIRE)--Jan. 11, 1996--The Bear Stearns Companies Inc. (NYSE:BSC) announced today the formation of Bear Stearns Financial Products Inc. ("BSFP") and Bear Stearns Trading Risk Management Inc. ("BSTRM"). BSFP and BSTRM have been established to provide clients with a Bear Stearns triple-A-rated counterparty offering a wide range of global fixed income and equity derivative products. BSFP is a wholly owned subsidiary of The Bear Stearns Companies Inc. and BSTRM is a wholly owned and fully guaranteed subsidiary of BSFP.

The subsidiaries have been uniquely designed by Bear Stearns to provide its customers with the choice of transacting with either BSFP, a continuation structure, or BSTRM, a termination structure. The structures differ in the way they handle trigger events which affect the creditworthiness of the entities. Under the continuation structure, all contracts will run until their original maturity with a contingent manager if a trigger event occurs. Under the termination structure, contracts will, following a trigger event, be cash-settled prior to their original maturity.

Standard & Poor's has assigned a AAA rating classification to BSFP and a AAAt rating to BSTRM. In addition, the subsidiaries have applied to Moody's Investors Service, Inc. for an Aaa rating. The credit rating is in part determined by the subsidiaries' ability to support the market and credit risks associated with their transactions. To this end, BSFP will initially be capitalized with $150,000,000.

"The creation of BSFP and BSTRM allows for the further expansion of the derivatives business at Bear Stearns which has become an increasingly important part of our global franchise," said Warren J. Spector, Executive Vice President and head of fixed income at Bear Stearns. "The triple-A rating will facilitate more transactions with a growing base of highly rated, globally-oriented, multinational customers."

"The new subsidiaries are a natural extension of Bear Stearns' commitment to its derivatives business," said Wendy L. de Monchaux, Senior Managing Director responsible for Bear Stearns' global derivatives effort. "I am particularly pleased that we are now able to offer our clients the ability to choose the triple-A structure that best suits them."

Additional information regarding BSFP and BSTRM can be obtained from Peter Croncota, Manging Director and head of fixed income derivative marketing; Donald Martocchio, Senior Managing Director and head of equity derivative marketing; or Paul Raymond, who has management responsibility for the subsidiaries.

The Bear Stearns Companies Inc. (NYSE:BSC) is the parent company of Bear, Stearns & Co. Inc., a leading worldwide investment banking and securities trading and brokerage firm. With over $6.8 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 and trading, asset management and custody services. Through Bear, Stearns Securities Corp., it provides professional and correspondent clearing, including securities lending. Headquartered in New York City, the company has over 7,400 employees located in domestic offices in Atlanta, Boston, Chicago, Dallas, Los Angeles, San Francisco and Washington, D.C.; and an international presence in Beijing, Buenos Aires, Frankfurt, Geneva, Hong Kong, Karachi, London, Madrid, Manila, Paris, Sao Paulo, Shanghai, Singapore and Tokyo.

CONTACT: Bear Stearns & Co. Inc., New York

Hannah Burns, 212/272-2395

Mary Flounders, 212/272-8188