Lehman to price 13.15% reverse exchangeables linked to Valero Energy

By E. Janene Geiss

Philadelphia, Sept. 11 - Lehman Brothers Holdings Inc. plans to price an issue of reverse exchangeable notes due March 28, 2008 linked to Valero Energy Corp. common stock, according to an FWP filing with the Securities and Exchange Commission.

The six-month notes will pay 6.575% for an annualized rate of 13.15%. Interest will be payable monthly.

The payout at maturity will be par unless the stock falls below the trigger price - 80% of the initial share price - during the life of the notes and finishes below the initial share price, in which case the payout will be a number of Valero Energy shares equal to $1,000 divided by the initial share price.

The notes will price on Sept. 25 and settle on Sept. 28.

Lehman Brothers Inc. is the agent.

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