Lehman to issue bonus notes linked to metals basket

By E. Janene Geiss

Philadelphia, June 21 - Lehman Brothers Holdings Inc. plans to price an issue of zero-coupon non-principal-protected bonus notes due June 29, 2010 linked to a basket of metals, according to an FWP filing with the Securities and Exchange Commission.

The basket consists of equal weights of copper - grade A, primary nickel, special high-grade zinc and high-grade primary aluminum.

If the basket gains more than 50%, the payout at maturity will be par plus the basket return.

If the return is better than a loss of 25% and less than or equal to a gain of 50%, the payout will be par plus 50%.

The payout will be par plus the basket return plus 25% if the basket loses 25% or more.

The notes are expected to price June 22 and settle June 29.

Lehman Brothers Inc. is the underwriter.

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