New Issue: Lehman prices $1.3 million 9% reverse exchangeables linked to Norfolk Southern

By Jennifer Chiou

New York, April 3 - Lehman Brothers Holdings Inc. priced $1.3 million of 9% annualized reverse exchangeable notes due Oct. 7, 2008 linked to the common stock of Norfolk Southern Corp., according to a 424B2 filing with the Securities and Exchange Commission.

Interest is payable monthly.

The payout at maturity will be par unless Norfolk Southern shares fall by more than 30% during the life of the notes and the final share price is less than the initial share price, in which case the payout will be a number of Norfolk Southern 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:	Norfolk Southern Corp. (Symbol: NSC)
Amount:	$1.3 million
Maturity:	Oct. 7, 2008
Coupon:	9%, payable monthly
Price:	Par
Payout at maturity:	If the stock closes below the trigger price during the life of the notes and finishes below the initial share price, a number of Norfolk Southern shares equal to $1,000 divided by the initial share price or, at Lehman's option, the equivalent cash value; otherwise, par
Initial share price:	$56.05
Trigger price:	$39.235, 70% of initial share price
Pricing date:	April 2
Settlement date:	April 7
Underwriter:	Lehman Brothers Inc.
Fees:	2.01%

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