New Issue: Lehman sells $500,000 17.2% reverse exchangeables linked to Titanium Metals

By Laura Lutz

Des Moines, June 25 - Lehman Brothers Holdings Inc. priced a $500,000 issue of 17.2% reverse exchangeable notes due Dec. 27, 2007 linked to the common stock of Titanium Metals Corp., according to a 424B2 filing with the Securities and Exchange Commission.

Interest will be payable monthly.

Payout at maturity will be par unless Titanium stock falls below the knock-in price of $22.575 - 70% of the initial value - during the life of the notes and finishes below its initial share price of $32.25, in which case the payout will be a number of Titanium shares equal to $1,000 divided by the initial share price.

Lehman Brothers is the agent.

Issuer:	Lehman Brothers Holdings Inc.
Issue:	Reverse exchangeable notes
Underlying stock:	Titanium Metals Corp.
Amount:	$500,000
Maturity:	Dec. 27, 2007
Coupon:	17.2%, payable monthly
Price:	Par
Payout at maturity:	Par unless Titanium stock falls below the knock-in price of $22.575 during the life of the notes and finishes below its initial value, in which case payout will be a number of shares equal to $1,000 divided by the initial share price
Initial share price:	$32.25
Knock-in price:	$22.575, 70% of $32.25
Pricing date:	June 22
Settlement date:	June 27
Agent:	Lehman Brothers
Fee:	1.5%

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