Lehman to begin offering 0% index-linked review notes

By Angela McDaniels

Seattle, Dec. 13 - Lehman Brothers Holdings Inc. will sell 0% review notes linked to an index from time to time, according to a 424B2 filing with the Securities and Exchange Commission.

If the index level on any review date is greater than or equal to the call level, the notes will be automatically called and investors will receive par plus a fixed cash payment.

If the notes are not called, the payout at maturity will be par unless the final index level is less than the initial index level, in which case investors will be fully exposed to any decline in the index.

Some issues of review notes may have a buffer. The payout at maturity for these notes will be par unless the final index level is less than the buffer level, in which case the investors will lose 1% multiplied by the leverage factor for every 1% decline beyond the buffer level.

The review dates, call level, cash payment, buffer level and leverage factor, if applicable, will be determined in the pricing supplement for each issue.

Lehman Brothers Inc. will be the agent for the offerings.

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