New Issue: Lehman sells $3.52 million 9.25% reverse exchangeables linked to H&R Block

By Laura Lutz

Des Moines, July 24 - Lehman Brothers Holdings Inc. priced a $3.52 million issue of 9.25% reverse exchangeable notes due July 25, 2008 linked to the common stock of H&R Block, Inc., according to a 424B2 filing with the Securities and Exchange Commission.

Interest will be payable monthly.

Payout at maturity will be par unless H&R Block stock falls below the knock-in price of $16.395 - 75% of the initial share price - during the life of the notes and finishes below its initial share price of $21.86, in which case the payout will be a number of H&R Block shares equal to $1,000 divided by the initial share price.

Lehman Brothers Inc. is the underwriter.

Issuer:	Lehman Brothers Holdings Inc.
Issue:	Reverse exchangeable notes
Underlying stock:	H&R Block, Inc.
Amount:	$3.52 million
Maturity:	July 25, 2008
Coupon:	9.25%, payable monthly
Price:	Par
Payout at maturity:	Par unless H&R Block stock falls below the knock-in price of $16.395 during the life of the notes and finishes below its initial share price, in which case payout will be a number of shares equal to $1,000 divided by the initial share price
Initial share price:	$21.86
Knock-in price:	$16.395, 75% of $21.86
Pricing date:	July 20
Settlement date:	July 25
Underwriter:	Lehman Brothers Inc.
Fees:	3.5%

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