Lehman to price 1% synthetic convertibles exchangeable for Intel

By Angela McDaniels

Seattle, Oct. 9 - Lehman Brothers Holdings Inc. plans to price 1% synthetic convertible notes due Aug. 17, 2014 with a 14.37% conversion premium linked to the common stock of Intel Corp., according to an FWP filing with the Securities and Exchange Commission.

The initial execution price will be $23.99, and the conversion price will be $27.4373. The conversion ratio will be 36.446735 Intel shares.

The payout at maturity will be par plus any increase in the share price above 14.37%. The redemption amount will be payable in cash or Intel shares, at Lehman's option.

The notes will be callable beginning Aug. 10, 2010. The redemption amount will be calculated in the same manner as the payout at maturity and will be payable in cash.

Lehman Brothers will be the underwriter.

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