New Issue: Lehman sells $500,000 13.3% reverse exchangeables linked to Apple

By Jennifer Chiou

New York, June 20 - Lehman Brothers Holdings Inc. priced a $500,000 issue of 13.3% annualized reverse exchangeable notes due Dec. 25, 2007 linked to the common stock of Apple Inc., according to a 424B2 filing with the Securities and Exchange Commission.

Interest will be payable monthly.

Payout at maturity will be par unless Apple stock falls below the knock-in price of $87.563 - 70% of the initial share price - during the life of the notes and finishes below its initial share price of $125.09, in which case the payout will be a number of Apple shares equal to $1,000 divided by the initial share price.

Lehman Brothers is the underwriter.

Issuer:	Lehman Brothers Holdings Inc.
Issue:	Reverse exchangeable notes
Underlying stock:	Apple Inc.
Amount:	$500,000
Maturity:	Dec. 25, 2007
Coupon:	13.3% annualized, payable monthly
Price:	Par
Payout at maturity:	Par unless Apple stock falls below the knock-in price of $87.563 during the life the notes and finishes below its initial share price, in which case payout will be Apple shares equal to $1,000 divided by the initial price
Initial share price:	$125.09
Knock-in price:	$87.563, 70% of $125.09
Pricing date:	June 18
Settlement date:	June 25
Underwriter:	Lehman Brothers
Fees:	0.5%

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