Lehman to price variable-rate notes linked to the Consumer Price Index

By Angela McDaniels

Seattle, July 23 - Lehman Brothers Holdings Inc. plan to price variable-rate notes due July 16, 2010 linked to the Consumer Price Index, according to an FWP filing with the Securities and Exchange Commission.

The notes will price and settle in July.

Interest will be payable semiannually and will equal a base rate - expected to be 3.02% - multiplied by the CPI ratio, which will equal the final index rate for that interest period divided by the initial index rate. The minimum interest rate for each period will be zero.

The payout at maturity will be par plus any increase in the index. Investors will receive at least par.

Lehman Brothers Inc. will be the underwriter.

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