New Issue: Lehman prices $1 million 16.8% reverse convertibles linked to Valero Energy

New York, June 25 - Lehman Brothers Holdings Inc. priced $1 million of 16.8% reverse convertible notes due Dec. 31, 2008 linked to Valero Energy Corp. shares, according to a 424B2 filing with the Securities and Exchange Commission.

Payout at maturity will be par in cash unless Valero Energy shares fall below the protection price of $28.054, 65% of the initial price of $43.16, during the life of the notes and finishes below the initial price in which case the payout will be Valero Energy shares equal to $1,000 principal amount divided by the initial price.

Lehman Brothers is the agent.

Issuer:	Lehman Brothers Holdings Inc.
Issue:	Reverse convertible notes
Underlying stock:	Valero Energy Corp. (Symbol: VLO)
Amount:	$1 million
Maturity:	Dec. 31, 2008
Coupon:	16.8%, payable monthly
Price:	Par
Payout at maturity:	Par in cash unless Valero Energy stock falls below the protection price of $28.054, 65% of the initial price, and finishes below the initial price, in which case Valero Energy shares equal to $1,000 principal amount divided by the initial price
Initial price:	$43.16
Protection price:	$28.054, 65% of $43.16
Pricing date:	June 24
Settlement date:	June 30
Agent:	Lehman Brothers
Fees:	1.75%

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