Lehman to issue 17.1% reverse exchangeables linked to stock basket

By Laura Lutz

Des Moines, June 19 - Lehman Brothers Holdings Inc. plans to price an issue of 17.1% reverse exchangeable notes due June 30, 2008 linked to the a basket of stocks, according to an FWP filing with the Securities and Exchange Commission.

The basket consists of the common stocks of Pfizer Inc.; Citigroup Inc.; Verizon Communications Inc.; Altria Group, Inc.; AT&T Inc.; General Motors Corp.; Merck & Co., Inc.; General Electric Co.; E. I. du Pont de Nemours and Co.; and JPMorgan Chase & Co.

If any stock in the basket falls below its trigger price - 65% of its initial price - during the life of the notes and any stock finishes below its initial share price, the payout will be a number of shares of the worst-performing stock equal to $1,000 divided by that stock's initial price.

Otherwise, investors will receive par.

The notes are expected to price on June 20 and settle on June 29.

Lehman Brothers Inc. will be the underwriter.

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