Lehman to price $38.3 million 1.25% notes linked to Whole Foods

By Laura Lutz

Washington, Jan. 31 - Lehman Brothers Holdings Inc. plans to price a $38.3 million issue of 1.25% notes due Feb. 6, 2014 linked to the common stock of Whole Foods Market, Inc., according to a 424B5 filing with the Securities and Exchange Commission.

The notes are expected to settle on Feb. 6.

If the share price of Whole Foods stock exceeds the threshold value on Feb. 3, 2014, the final valuation date, investors will receive par plus the return on the stock, payable in stock or cash at Lehman's option. Otherwise, investors will receive par.

The threshold value will be 118% of the average execution price per share of common stock Lehman Brothers paid to hedge the notes.

The deal includes a $5.745 million greenshoe, exercisable within 13 days of the original issue.

The notes are callable beginning Jan. 30, 2010. The redemption amount will be calculated in the same manner as the payout at maturity.

Lehman Brothers will be the underwriter.

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