New Issue: Lehman prices $348,000 14% reverse exchangeables linked to Peabody

By Susanna Moon

Chicago, April 8 - Lehman Brothers Holdings Inc. priced $348,000 of 14% annualized reverse exchangeable notes due July 9, 2008 linked to the common stock of Peabody 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 70% during the life of the notes and finishes below the initial share price, in which case the payout will be a number of Peabody 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:	Peabody Energy Corp. (NYSE: BTU)
Amount:	$348,000
Maturity:	July 9, 2008
Coupon:	14%, 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, 17.5223 shares; otherwise, par
Initial share price:	$57.07
Barrier price:	$39.949, 70% of initial price
Pricing date:	April 4
Settlement date:	April 9
Underwriter:	Lehman Brothers Inc.
Fees:	2.1%

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