New Issue: Lehman sells $62,000 9% reverse exchangeables linked to Morgan Stanley

By Jennifer Chiou

New York, June 28 - Lehman Brothers Holdings Inc. priced a $62,000 issue of 9% annualized reverse exchangeable notes due Dec. 29, 2007 linked to the common stock of Morgan Stanley, according to a 424B2 filing with the Securities and Exchange Commission.

Interest will be payable monthly.

Payout at maturity will be par unless Morgan Stanley stock falls below the knock-in price of $71.494 - 85% of the initial value - during the life of the notes and finishes below its initial price of $84.11, in which case the payout will be a number of Morgan Stanley 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:	Morgan Stanley
Amount:	$62,000
Maturity:	Dec. 29, 2007
Coupon:	9% annualized, payable monthly
Price:	Par
Payout at maturity:	Par unless Morgan Stanley stock falls below the knock-in price of $71.494 during the life 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 price:	$84.11
Knock-in price:	$71.494, 85% of $84.11
Pricing date:	June 26
Settlement date:	June 29
Agent:	Lehman Brothers
Fees:	2.435%

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