New Issue: Lehman prices $1.75 million 13.15% reverse exchangeables linked to Valero Energy

By Jennifer Chiou

New York, Sept. 27 - Lehman Brothers Holdings Inc. priced a $1.75 million issue of 13.15% annualized reverse exchangeable notes due March 28, 2008 linked to the common stock of Valero Energy Corp., according to a 424B2 filing with the Securities and Exchange Commission.

Interest is payable monthly.

The payout at maturity will be par unless the stock falls by more than 20% during the life of the notes and finishes below the initial share price, in which case the payout will be a number of Valero Energy shares equal to $1,000 divided by the initial share price or, at the bank's option, the equivalent cash value.

Lehman Brothers Inc. is the underwriter.

Issuer:	Lehman Brothers Holdings Inc.
Issue:	Reverse exchangeable notes
Underlying stock:	Valero Energy Corp. (Symbol: VLO)
Amount:	$1,745,000
Maturity:	March 28, 2008
Coupon:	13.15%, payable monthly
Price:	Par
Payout at maturity:	If the stock falls below the barrier price during the life of the notes and finishes below the initial share price, a number of shares equal to $1,000 divided by the initial price or the equivalent cash value; otherwise, par
Initial share price:	$68.85
Barrier price:	$55.08, 80% of initial share price
Pricing date:	Sept. 25
Settlement date:	Sept. 28
Underwriter:	Lehman Brothers Inc.
Fees:	2.15%

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