New Issue: Lehman prices $0.865 million 25.6% reverse exchangeables linked to Openwave Systems

By Jennifer Chiou

New York, May 30 - Lehman Brothers Holdings Inc. priced a $0.865 million issue of 25.6% annualized reverse exchangeable notes due Aug. 30, 2007 linked to the common stock of Openwave Systems Inc., according to a 424B2 filing with the Securities and Exchange Commission.

Interest is payable at maturity.

The payout at maturity will be par unless Openwave Systems stock falls by more than 20% during the life of the notes and finishes below the initial share price, in which case the payout will be a number of Openwave Systems 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:	Openwave Systems Inc.
Amount:	$0.865 million
Maturity:	Aug. 30, 2007
Coupon:	25.6% annualized, payable at maturity
Price:	Par
Payout at maturity:	If Openwave Systems stock closes below the trigger price during the life of the notes and finishes below the initial share price, a number of Openwave Systems shares equal to $1,000 divided by the initial share price or the equivalent cash value; otherwise, par
Initial share price:	$9.60
Trigger price:	$7.68, 80% of initial share price
Pricing date:	May 29
Settlement date:	May 30
Underwriter:	Lehman Brothers Inc.
Fees:	1.25%

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