New Issue: Lehman prices $500,000 21.25% reverse exchangeables linked to Apple

By Susanna Moon

Chicago, Jan. 14 - Lehman Brothers Holdings Inc. priced $500,000 of reverse exchangeable notes due Feb. 20, 2008 linked to the common stock of Apple, Inc., according to a 424B2 filing with the Securities and Exchange Commission.

The one-month notes pay an annualized rate of 21.25%. Interest is payable at maturity.

The payout at maturity, in addition to interest, will be par unless Apple stock falls by 29% 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. 20, 2008
Coupon:	21.25%, payable at maturity
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, 5.7944 Apple shares or, at Lehman's option, the equivalent cash value; otherwise, par
Initial share price:	$172.58
Trigger price:	$122.5318, 71% of initial share price
Pricing date:	Jan. 11
Settlement date:	Jan. 18
Underwriter:	Lehman Brothers Inc.
Fees:	0.625%

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