New Issue: Lehman prices $2.35 million 13% reverse exchangeables linked to GM

By Angela McDaniels

Tacoma, Wash., Nov. 6 - Lehman Brothers Holdings Inc. priced $2.35 million of reverse exchangeable notes due Feb. 7, 2008 linked to the common stock of General Motor Corp., according to a 424B2 filing with the Securities and Exchange Commission.

The three-month notes will pay 3.25% for an annualized rate of 13%. Interest is payable monthly.

The payout at maturity will be par unless GM shares fall by more than 35% during the life of the notes and the final share price is less than the initial share price, in which case the payout will be a number of GM shares equal to $1,000 divided by the initial share price or, at Lehman's option, the equivalent cash value.

Lehman Brothers Inc. is the underwriter.

Issuer:	Lehman Brothers Holdings Inc.
Issue:	Reverse exchangeable notes
Underlying stock:	General Motors Corp. (Symbol: GM)
Amount:	$2,346,000
Maturity:	Feb. 7, 2008
Coupon:	13%, payable monthly
Price:	Par
Payout at maturity:	If GM shares close below the trigger price during the life of the notes and finish below the initial share price, 27.0344 GM shares or equivalent cash value; otherwise, par
Initial share price:	$36.99
Trigger price:	$24.0435, 65% of initial share price
Pricing date:	Nov. 2
Settlement date:	Nov. 7
Underwriter:	Lehman Brothers Inc.
Fees:	1.78%

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