New Issue: Lehman prices $500,000 15.75% reverse exchangeables linked to Apple

By Angela McDaniels

Seattle, Aug. 10 - Lehman Brothers Holdings Inc. priced $500,000 of reverse exchangeable notes due Feb. 14, 2008 linked to the common stock of Apple Inc., according to a 424B2 filing with the Securities and Exchange Commission.

The six-month notes will pay 7.875% for an annualized rate of 15.75%. Interest is payable monthly.

The payout at maturity will be par unless Apple stock falls by 30% or more during the life of the notes and finishes below the initial share price, in which case the payout will be a number of Apple shares equal to $1,000 divided by the initial share price or, at Lehman's option, the equivalent cash value.

Lehman Brothers Inc. is the underwriter.

Issuer:	Lehman Brothers Holdings Inc.
Issue:	Reverse exchangeable notes
Underlying stock:	Apple Inc. (Nasdaq: AAPL)
Amount:	$500,000
Maturity:	Feb. 14, 2008
Coupon:	15.75%, payable monthly
Price:	Par
Payout at maturity:	If Apple stock closes below the trigger price during the life of the notes and the final share price is less than the initial share price, 7.91202 Apple shares or the equivalent cash value; otherwise, par
Initial share price:	$126.39
Trigger price:	$88.473, 70% of initial share price
Pricing date:	Aug. 9
Settlement date:	Aug. 14
Underwriter:	Lehman Brothers Inc.
Fees:	1.5%

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